Back in April, BMO Harris Bank was the first major lender to switch to flat fees from a dealer-reserve compensation structure. Since then, it appears the bank’s loan volume has taken a dive. Through April, BMO Harris Bank had been averaging 11,700 finance contracts per month, according to Experian Automotive’s AutoCount data. In the two months following the pricing shift, finance volume climbed to about 15,000 units per month. But volume in July, August, and September dropped nearly 50%, to the 8,000-unit-per-month range, according to AutoCount.
While bank spokesman Patrick O’Herlihy admitted that auto loan volume had dropped, he pointed out that the shift was unrelated to the pricing change.
“Due to a variety of factors, there had been a slight drop-off in volume during that time highlighted below,” O’Herlihy told Auto Finance News. “This was not due to the new flat-fee structure. We continue to receive positive feedback from our dealers on that program.” In fact, O’Herlihy pointed out, “in the months that are yet to be reported by AutoCount, we’re seeing improved performance and momentum in the business.”
