AFN: How does the educational component play into your customer service process?
RH: We have taken the approach of giving the opportunity for people to learn how to establish and build credit, especially for someone who has been through some sort of a credit crisis, and how to get back on their feet. Our collections process, in particular, is counseling-style. We spend a lot of time teaching our people to educate our customers. With direct lending now, our goal is to provide them [customers] not only an auto loan, but some ideas on some other things they can do to move up from the arena of the lower rates [credit scores].
AFN: And do you see your consumers move up the credit spectrum?
RH: The rate reduction program we have helps. With timely payments, consumers can improve their interest rates over time. … Subprime consumers really benefit from it.
AFN: Why join the direct-lending pipeline now, when the competition is so high?
RH: There is always competition, but we are not pushed by competition. We don’t have a ton of experience, but the market outlook is good, and we have the resources necessary. We have been privately held. There is no reason for us to go out there and increase our portfolio. We can stop originating tomorrow. When things turn negative, we are quick to pull back and reassess and identify how we can do better. We are not going to be the company taking wild risks. The direct lending is still new for us, but it will grow in the next couple of years to become a prominent part of our business. Could we continue what we do today and plug along? We could, but there is competition, and direct lending gives us a little more diversification.
