DALLAS — Lenders have been more actively policing their dealer networks, executives said during a panel at the Auto Finance Performance and Compliance Summit.
Regions Dealer Services has deactivated “quite a few” dealerships in the past few years since settling into its prime/super-prime niche, said Tom Lazenby, senior vice president and head of dealer financial services and direct automotive lending. A handful of large national dealer groups get the most attention, but single-point dealerships are next in line as Regions caters to a rural banking community.
The bank also has a policy to help “rehabilitate” dealers, Lazenby said, as does SunTrust Dealer Financial Services.
“We take a look at the last six months’ worth of volume, and we take a look at the last 12 months’ worth of delinquency,” said SunTrust First Vice President Cindy Hall. “We determine whether our dealers are going to be on our watchlist or whether they’re at a point where they’ve hit too many key performance indicators. At that point, there’s really nothing that we can do to salvage that dealer.” SunTrust then devises an action plan for dealers whose relationships can be mended.
At U.S. Bank, 75 client managers track dealers daily for delinquency and repossession patterns among their consumer borrowers, said Tim Sullivan, senior vice president of dealer services. “We can see what’s coming through the door,” he said. “The first sign of any kind of issues might be with the applications you’re getting in.”
