Delinquencies for subprime automotive borrowers has been rising.
The stats and trends below most likely prompt BHPH dealers and vehicle finance companies to re-evaluate what measures they are taking to ensure their vehicle assets and bottom line are protected:
- 86% of American workers use automobiles to get to work every day – U.S. Census Bureau
- The total number of auto loans hit an all-time high of $1 trillion in Q2 of 2016, up 10% from the previous year – Experian
- 22% of all auto loans are subprime loans – Standard and Poor’s
- Auto delinquencies have risen every month since February 2016 – USA Today
- Approximately, 1-in-3 credit challenged consumers will default on their BHPH car loan – NABD Benchmark Trends 2015
- Most of the defaults occurred within 7 months of securing the loan – NABD Benchmark Trends 2015
- Customers who were 60 days or more behind on payments, reached 4.86% in August 2016, a 22% increase from August 2015 – Fitch Ratings
- Losses on bonds backed by risky car loans were at 8%, a climb of over 27% in August 2016 from a year ago – Fitch Ratings
- 12% of car buyers took out a loan with longer repayment periods than the amount of time they planned to own the vehicle – MarketWatch
- In May 2016, auto lenders collected around 63% of the outstanding loan balances that were in default, down from 67% a year prior – Jefferies Investment Banking Firm
So, if you’re wondering how you can be better prepared when a customer stops paying and the vehicle you financed disappears, the answer is GPS technology.
Reduce Your Risks with GPS Technology – The Ultimate Protection
GPS is a proven technology that lowers your risks and the costs associated with recovering a vehicle should the need arise. And although there are many GPS service providers out there, not all are equal. Advantage GPS has the latest evolution in risk mitigation that provides BHPH dealers and vehicle finance companies the most advanced GPS technology available. The system includes a suite of smart toolsets:
- Instant locates and real-time GPS tracking in 5-minute increments for moving vehicles
- Geofences instantly mapped out around nearby impound lots for you
- Risk mitigation dashboard – smart alerts on potential risks
- Push notifications with vehicle details to repo agent when a recovery is necessary
- Simple e-transfer of devices
- Rolling list of top stops
- All-in-one login access
- And more…
The Fitch report also indicated that these trends will lead to lower recoveries in auto-backed securities. Now’s the time to make sure your assets and your bottom line are protected. We do more than just monitor your assets; we fix the problem.