The Glass Is Half Full
Vehicle sales reports for December are starting to trickle in, and the results are generally in line with expectations. The majority of manufacturers will record double-digit declines for the month — and year.
Already, Ford announced a 32% decline for December and 21% for the full year.
Sure, the news will get worse before it gets better, but there is a silver lining in all this. You see, throughout 2008, industry executives revised and re-revised their sales targets because of record-high gas prices, plunging consumer confidence, soaring unemployment, and a handful of other factors. The year started out on a 12-million-unit-SAAR trajectory; it ended at about a nine-million-unit pace.
But with 2008 behind us, we actually have some direction. We can isolate the overall year-over-year sales decline (probably about 20%) — and move forward. Estimates for 2009 vehicle sales are in the 10-million-unit range. It’s a far cry from the 16-million mark of 2007, but it seems like a realistic starting point — one from which we will continue to grow.
My company realized this was a problem in the motor vehicle lending business years ago and started building a software SaaS system to help eliminate the problems lenders and dealers address today. Go to https://www.enetfs.net and review the information.
E-net’s Desking, Loan Application and Lender Selection Process is an integrated electronic system that gathers information from a customer’s questionnaire, credit application, credit bureau report and the complete dealer’s loan package including vehicle information and insurance coverage. It then instantaneously queries all that information against all of the lender’s credit risk models a dealer is associated with. E-net doesn’t just look at the credit report to make the lender selection.
To accomplish this E-net pull’s a Credit Report and stores the data, next the dealer completes the loan application and desks the deal. Then they integrate all of that electronic information against each of the lenders risk models they are associated with to indicate which of their lenders and tier levels are most likely to finance the loan package. Lenders have access to their risk model information to update, modify or change their risk instantly, improving dealers’ data quality and lending availability.
The dealer can process their loan package, over and over again with E-net’s Desking and Lender Selection System until they get a loan package that has up to a 95% probability of one or more lenders approving the loan on the front end of the sales process, regardless of the credit quality. All this is completed in minutes before the customer signs the contract agreement. When that vehicle rolls out of the dealership baring unknown factors, 95% of the time it’s a done deal and financed in days.
E-net software qualifies each loan package to a lender’s credit risk models before the customer signs the contract. On December 13, 2006, the Board of Governors of the Federal Reserve System, and other agencys issued an Interagency Policy Statement on the adequacy of the “Allowance for Loan and Lease Losses” (ALLL). All lending institutions are now required under this federal mandate to justify loan quality during the initial loan origination process. E-net provides lenders with a better method to communicate with the dealer during preparation of the loan package.
We are also ready to help all the dealers and lenders meet the new requirements coming down for financing.
Bill