DALLAS — In the auto finance sector, players have returned to the market as the environment continues to improve, but as a lender, setting yourself apart from the competition can come with challenges.
“For us, it’s really about building relationships with those dealers,” said Brian Switalski, president of Southern Auto Finance Co. (SAFCo), noting that other lenders in the subprime space typically offer similar interest rates.
For SAFCo, it comes down to customer service and helping dealers understand how the lender’s program works. For a niche player in the subprime market like SAFCo, funding is critical. Stipulations on loan contracts are “heavy,” Switalski noted, so visiting dealers in-person and staying in contact continuously through the stip process is helpful.
“The more you assist the dealer in doing that for them, help them, guide them in that process, they may use you over some of your competition,” he said.“That’s the key to our success: actually being in the store.”
For Regions Bank Dealer Financial Services, differentiation means providing niche products. The bank has seen success in a certified pre-owned program.
“If you’ve noticed, there is a lot more emphasis being placed by the manufacturers on CPOs,”said Senior Vice President Tom Lazenby during a session at the Auto Finance Risk Summit being held here this week.
Retention rate for those customers is extremely high, he went on to say. Another niche Regions is trying to fill is helping dealers sell their inventory to the millions of customers who already do their banking through Regions. The bank sets up a customer with financing and directs them to one of its dealers.
“That’s just another way we are trying to build that relationship with the dealer,” he said.
Additionally, Regions plans to roll out an “auto credit card” where customers can use points to lower their monthly loan payments.
