Vehicle Restrictions with Bad Credit

You can’t finance just any car if you have credit problems because most subprime lenders have vehicle restrictions on the kinds of cars you can finance.

Vehicle Restriction Questions

Because we have spent the past two decades working with credit-challenged car buyers here at Auto Credit Express, we currently receive at least two hundred questions each month, most of them dealing with auto finance. Here is just one:

“I have already been shopping for a vehicle and was wondering if there are any restrictions on the vehicle, as far as a loan is concerned?”

There are a few things here that need to be discussed, so let’s begin.

We Are Not a Lender

Like many questions we receive, it looks like this borrower thinks Auto Credit Express is a bank. We aren’t. What we do is match consumers to dealers in their area that work with a wide range of lenders. Even if this person has less than perfect credit, the finance department should have the experience to understand their situation.

Conquer fear of credit cards now, reap benefits later

  • Aren’t there risks? Just as using credit cards responsibly can build your credit, using them irresponsibly can damage it. Piling up debt, maxing out the card, paying late or missing payments hurts your score.
  • If you have no credit, can you get a card? Newcomers to credit have a couple of options. One is a secured credit card. With these, you make a refundable security deposit — say, $200 or $500 — and this becomes your credit line.

Auto finance changes gear

In many ways the Chinese auto industry has undergone seismic transformation in the past ten years. It surpassed the US as the largest vehicle sales market in 2009, and is now also one of the largest motor insurance markets in the world.

With this growth, we have also witnessed a significant change in the industry structure, a trend that we see is playing out in China as it is in Europe. Be it Tesla’s electric car launch, Google’s driverless car technology or the emergence of Uber and its Chinese equivalent Didi, new technologies are changing the mobility preference of a generation of Chinese consumers.

The pressure to rationalise production capacity is likely to intensify. Sales of new vehicles, though still growing, are unlikely to continue at the brisk pace that they once did. In many ways China is now following the footsteps of more mature auto markets such as the US. OEMs and dealers in mature markets have long turned to alternative revenue sources to make up for their vehicle sales which enjoys at best anaemic growth.

Auto fmance in particular has been a focal point of their efforts. This is unsurprising given its complementarity with vehicle sales: not only do financial products facilitate vehicle sales, they also help OEMs and dealers capture a large share of the customer wallet.

We believe that similar trends will be increasingly at play in China, which will allow the industry to signlficantly improve its revenue and profit model. However, with the advent of in-car technologies and multi-channel consumer touchpoints, opportunities in auto finance are for the picking by those who have a coherent customer proposition and channel strategy.

Great leaps

The Chinese auto finance sector has made huge strides in recent years. By way of illustration, the auto loan market grew more than three times in size from RMB 15bn in 2009 to RMB 66bn 2014, or 30% year-on-year growth.

Having only recently overcome the cultural barrier that prevented most from buying consumer goods on credit, the average Chinese buyer is beginning to embrace the benefits of auto finance, namely the liquidity and convenience that it brings.

However, a comparison between China’s market and more mature markets in terms of auto industry profit contribution by source would indicate that the China auto finance sector still has much room to develop.

Whilst auto finance is typically the largest profit contributor in mature markets, accounting for 28% of total industry profit, the corresponding figure for China is a mere 7%.

Looking at penetration of auto-related financial products tells a similar story. Penetration was around 30% of vehicle sales in 2015, a significant increase from 18% in 2011. By 2020 this is expected to reach 50%, primarily supported by higher consumer demand and pushed by OEMs and dealers to increase penetration. Even then, auto finance in China would still be lagging more mature markets such as the US and UK, pointing to significant headroom for development in the long term.

But serving future consumers would require a re-think of the current business model. We believe auto finance providers need to do much better in understanding and engaging their customers in order to serve the new generation of Chinese consumers who will be the driving force of growth in auto finance.

Compared to the prior generations, younger consumers are more financially sophisticated and appreciate the benefits of financial products. They are also more technically savvy and increasingly rely on a multitude of web-based resources to inform their purchasing decisions. One could therefore easily imagine a consumer who arrives at a dealer having a relatively well-formed view of the cars to buy as well as the source of financing to use. This is likely to create challenges for auto finance companies that have relied mostly on physical dealer networks as channels to market.

Increasing use of the Internet for research has also made product comparison easier, creating a need for auto finance companies to differentiate themselves, either from a product or a consumer experience angle. As a case in point, some auto fmance providers are tailoring their products to different customer segments to better differentiate eg, for customers who have less predictable cashflow, repayment is split into two tranches: 50% upfront and 50% by end of payment term. Some auto finance providers have also begun to bundle their financial products and services, billing them as tools to deliver superior customer value. For example, Toyota now offers eight repair services for free as a part of their purchase loan offer.

The answer to these must be a re-think of the customer proposition and channel strategy. Some OEMs in mature markets have already embarked on this strategic shift: Mercedes has recendy launched Mercedes Me, a web-based portal that combines financial services, repair services, roadside rescue and mobility services, with a stated aim to deliver a “one-stop-shop” customer experience.

The Chinese auto finance market is primarily served by three types of providers: commercial banks, auto finance companies and other specialist providers including leasing companies, web-based financial companies and P2P lenders. Commercial banks have a natural advantage with low capital costs and extensive geographical reach through their branch networks. But they are poorly configured in an increasingly consumer-centric environment: their approval processes are long and their ability to tailor products to specific requirements is low. Above all, they are slow to respond to changing consumer trends.

In comparison, auto fmance companies and other specialist providers, which collectively account for the remaining 50% of the market, are better positioned. They are much closer to the consumers and have been at the forefront of many of the innovations in auto finance. Their product range is wide and deep, and approval processes are much more efficient. These providers also have lower qualifying requirements than commercial banks and could therefore tap into a much wider addressable market. Indeed, it is their ability to respond to customer needs that has allowed them to prosper despite having higher capital cost than commercial banks.

With the wealth of customer data that these auto finance providers possess, the challenge would be to leverage it to develop insights into customer demographics, purchasing behaviour and channel preferences that can ultimately inform their customer strategy. This is no easy feat for many of these companies, but there are a compelling strategic reasons to act now

The value chain of auto finance in China is likely to change in the coming years, with large and well-funded players entering the sector. For instance, Alibaba has set up an “internet car” fund with SAIC Motor to develop vehicle telematics, with the first model launching in July 2016.

In April 2016 Alibaba also rolled out a new purchase loan app called “Instant Automobile Financing”. It promises loan approval within 24 hours, which is a significant reduction in leadtime when compared to the 3-5 day approval process that is typical even for the more efficient auto finance companies. By analysing wider consumer data on the web (using big data tools), a full consumer credit profile could be constructed in a matter of hours, allowing credit approval processes to be accelerated significantly.

The credit profile could also help auto finance providers tailor their products and pricing for specific customers. Tencent, JD and Baidu have already joined forces to roll out a competing service called DaiKuan.

The emergence of these new technologies have allowed auto finance providers unprecedented access to their customers and their information. In return, consumers will be increasingly demanding in the products and services they receive and the speed with which they are delivered.

A successful player in the future would have to combine customer insights, product portfolio, channel strategy and speedy execution. Technologies have always proved more destructive than industry participants are willing to believe. The time to act is now.

Working Capital Options in Six Words

This report is designed to produce a concise explanation of current small business cash management issues by describing working capital options in six words. This analysis is one of several overviews about business banking problems and commercial loans. As suggested in the analysis below, even when there are substantial difficulties to be expected with most current efforts to obtain working capital, the entire process should be more effective for small business owners when major business financing obstacles are both understood and anticipated.

As the initial observation, “banks are not an effective solution” for almost any small business working capital financing situation. Many banks in every region of the country are routinely reducing or eliminating business lines of credit extended to small businesses. Even though commercial loan activity for banks continues to decline steadily, most bankers have continued to state that they are providing normal levels of business financing. Whether a small business needs a traditional working capital loan or a merchant cash advance based upon credit card processing activity, the commercial lender willing to provide the funding is increasingly unlikely to be a bank. In fact, it has become common to hear phrases such as “thinking outside the bank” and “business loans without banks” precisely because bank financing for small businesses has become so hard to obtain.

Household Debt Hits $12.7 Trillion: Here’s How You Can Handle Your Loans

According to the Federal Reserve Bank of New York, Americans have more debt than ever before.

Household debt has reached $12.7 trillion, an amount mainly spread out among mortgages, student loans, credit cards, and auto loans.

Many economistssee this uptick in debt as a sign of economic recovery. But for the individual borrower, debt can be a major burden.

If you hold a share of this $12.7 trillion in household debt, here aresome tips for getting out of the red.

1. Find the best student loan repayment plan

Student loans play a big role in our current national debt. In fact, student debt increased from $500 billion in early 2007 to over $1.34 trillion today.

According to data from the Consumer Financial Protection Bureau, $8.2 billion of those loans belong to subprime borrowers with a credit score of 580 or lower. That level of subprime debt is 32 percent higher than it was a year ago.

So it’s no surprise that student loan default rates have also gone up.The New York Fed reported that 11 percentof student loan balances have been delinquent for 90 days or more.

If you borrowed money for college or graduate school, you know how burdensome student loans can be. But defaulting has a host of bad consequences that can hang over your head for the rest of your life. You need a plan of attack for your student loans.

Whether or not you’ve graduated yet, take time to write down the details of your repayment plan. If you can’t meet your payments, look intoincome-driven repayment plansor student loan refinancing.

Thanks to these options, you’re not stuck with your current terms, interest rates, or loan servicers forever. You can change your plan, make your payments more manageable, and avoid default.

And if your payments aren’t too high, consider paying your student loans off early. Throwing an extra payment at your loans here and there can help you overcomeyour debt faster.

2. Payoff high-interest credit card debt first

If you’re struggling with high balances on your credit cards, you’ll want to tackle that first. Credit card debt makes up $764 billionof the current total debt. The average interest rate on a credit cardis about 13%.

If you’re revolving a balance with such a high interest rate, consider whether paying off your credit cardsdeserves your primary focus. You might be able to transfer your balance to a new card to take advantage of 0% promotional APR.

It could also be a smart move to take out a low-interest personal loan to tackle your credit card debt. Whatever you choose, your goal is to reduce the money you waste on interest.

If you’re a new grad getting a credit cardfor the first time, strive to pay it off in full every month. There’s a persistent myth that carrying a balance helps build credit. But in reality, carrying a balance just costs you more money.

So, try your best not to spend more than you can pay off every month. By making on-time payments and reducing debt, you’ll build a strong credit score.

3. Balance mortgage payments with saving for retirement

Mortgages make up the greatest portion of our $12.7 trillion in debt. In fact, Americans owe $8.6 trillionin housing loans, even more than they did in 2008.

But economists aren’t too worried about another global financial crash. According to the New York Fed, lenders seem to have cleaned up their practices when it comes to assessing candidates.

The report showed that 61 percentof new mortgages went to borrowers with strong credit scores of 760 or greater. In 2008, only 36 percent of new homeowners had credit at this level.

Presumably, homeowners today are more equippedto handle their mortgage payments than those 10 years ago. Some may even strive to pay their mortgage off early.

But with the average interest ratefor a 30-year fixed mortgage around 4%, according to Wells Fargo, it might be smart to stick to the standard plan and put your extra cash elsewhere.

For instance, it could pay off to invest extra income in a retirement savings account instead. Or you could put it toward loans with higher interest rates.

By weighing your various responsibilities, you can put your monthly income where it will go the farthest.

Avoid taking on more debt than you can handle

While some economists hail the new debt stats as a sign of economic growth, you should still be cautious about taking on too much debt.

Before signing on the dotted line of any loan, learn the details of your repayment plan and make sure your payments fit withinyour monthly budget.

Loans can help you earn your degree, establish a career, or a buy a big-ticket item like a house or car. But if you’re looking to borrow, first put a plan in place to manage your financesso that you’re in control.

Interested in refinancing student loans?
Here are the top 6 lenders of 2017!

Community West Bank Expands into Paso Robles

“After our loan production office opens in June, we will file an application for a full-service banking branch office to open in Paso Robles next year,” said Bill Filippin, executive vice president and CBO of Community West Bank.

“The banking landscape is changing, with fewer community banks and larger banks closing offices, he said.

More than ever, there is a need for flexible business financing and decision making that locally owned and managed Community West Bank provides,” he said.

Community West Bank opened a full-service branch office in San Luis Obispo in November 2016. In January, the bank relocated its Santa Maria branch office and opened a new branch office in Oxnard.

For more information, visit www.CommunityWestBank.com.

— Martin E. Plourd for Community West Bank.

Choice of genuine loan lender is crucial in small business financing.

Some companies deal in a line of credit or operating loan. This is usually attached to your main chequing account and can be used to pay operational expenses, when there is not enough money in the business bank account. This type of financing is ideal when there are ebbs and flows in a business’ cash flow or one is looking for small business financing. It can allow you to continue operating normally, when you are waiting on payment from clients or during a temporary slowdown in revenues.

Why Student Loan Debt Is A Women’s Issue

Women working full time with college degrees make 26 percent less than their male counterparts, though the gap is somewhat smaller immediately after college, according to AAUW. Lower pay means less income to devote to debt repayment.

Making less money puts women at a financial disadvantage in a number of ways, from having less agency in their lives and relationships, to having more difficulty paying their bills, student loans among them. And because women working full time make less money than men — but still shoulder more responsibility when it comes to parenting — the difficulty they have paying off their bills, increasing their net worth, and building wealth to the same degree as men is compounded over time.

6. Thanks to student debt, women are more likely than men to experience financial difficulties.

According to the report, four years after graduation, women with bachelor’s degrees who had not pursued postbaccalaureate education were more likely than men to report that their education costs had influenced them to delay buying a house, and to take a less desirable job or a job outside of their field. These same women were also less likely than men to be contributing to a retirement plan or account, further increasing the likelihood that they will be financially insecure in their later years.

7. Pell Grants for low-income students are really important.

One of AAUWs key policy recommendations to reducing debt-based financial aid is safeguarding and strengthening the Federal Pell Grant program for low-income undergraduate students. The grants are predominantly issued to students whose families earn less than $20,000 per year and, unlike student loans, they do not always require repayment.

President Trumps recent budget proposal would eliminate $3.9 billion in Pell funding (somehow leaving the Pell program on sound footing for the next decade).

However, as Mitchell explains, the Pell Grant supports low-income students who are less likely to have family help them along, and low-income students are disproportionately women.

Even for people who arent eligible, we strongly support making income-driven repayment plans more accessible for women of all incomes, he says.

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Which countries are driving Auto and Equipment Finance growth in the Asia Pacific region?

Among established markets, the greatest growth will come from two of the biggest regional economies of China and India.

CHINA

China in particular stands out for delivering very high growth for a large, established economy, with industry experts predicting asset finance will rise more than 20% during 2017.

Motor finance, healthcare and construction are all expected to perform well throughout 2017.

INDIA

India is a strong growth market for asset finance, with demand expected to rise by up to 15%.

The country may well be at the start of a period of rapid expansion that mirrors China’s recent economic journey.

However,legislation and culture may have a limiting effect.

Nidhi Bothra, of Vinod Kothari Consultants, said: “The appearance of various equipment on the financial statements seem to indicate strength in financials. Indian entities are not accustomed to the idea of being ‘balance -sheet light’.”

By contrast, more mature markets are less buoyant.

AUSTRALIA

In Australia, asset finance growth expectations are between 0% and 5% for 2017, albeit in a much larger market than emerging economies.

In the latest set of figures released by the Australian Equipment Lessors Association, new business volumes in general equipment finance were up 1.8% year-on-year in 2016 to $38.6 billion (2015: $37.9bn).

Fleet leasing enjoyed substantially higher growth of 21.4%, but from a lower start point, to account for $5.1bn of additional business (2015: $4.2bn).

JAPAN

In Japan, the leasing market declined slightly last year, although certain sectors, including transport, medical equipment and chemical equipment bucked the trend.

SUMMARY

The report notes that the entire region is experiencing the impact of global political changes, including the election of President Donald Trump in the US and escalating tensions over North Korea.

The decision of the US to end its involvement in the Asia Pacific Trade Agreement at the start of 2017, in particular, may jeopardise smaller economies, but the impact on China currently appears limited.

There are also local political risks in other countries in the region, with economies adjusting to new elections in Hong Kong, Laos, Myanmar, Nepal, the Philippines, Sri Lanka and Thailand.

To find out more download White Clarke Group’s complimentary Asia Pacific Asset and Auto Finance Survey 2017.

TCF Receives NICE 2017 Customer Excellence Award for Customer Experience

WAYZATA, Minn.–(BUSINESS WIRE)–TCF Financial Corporation (TCF) (NYSE: TCF) today announced that it is
the winner of a NICE (Nasdaq:NICE) 2017 Customer Excellence Award. This
award recognizes customers who have demonstrated innovation and
leadership in their approach to reinventing customer experience.

“Our 2017 award
winners represent true leadership in the contact center market, and are
setting an example for the rest of the industry on how to drive
measurable improvements in operational efficiency and customer
satisfaction, and ultimately achieve business impact.”

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TCF Bank received this award at the Interactions-ICUC 2017 global
customer conference in Las Vegas, the largest customer service industry
event. The company was recognized for its excellence in customer
experience.

The Customer Experience Excellence Award recognizing organizations for
significantly improving customer experience by implementing the NICE
solutions to analyze omnichannel customer interactions in real time and
take informed action.

“Congratulations to this year’s winners. We are proud to recognize the
achievements of our customers, who are using the NICE and inContact
solutions to reinvent customer service in their day-to-day operations,”
said Yaron Hertz, president of NICE Americas. “Our 2017 award
winners represent true leadership in the contact center market, and are
setting an example for the rest of the industry on how to drive
measurable improvements in operational efficiency and customer
satisfaction, and ultimately achieve business impact.”

“Our purpose is to serve customers in a way that makes their financial
lives easier. To achieve this purpose we have invested in programs, like
Voice of the Customer, to understand our customers’ needs. Understanding
what our customers are thinking and feeling about their experience has
been critical to transforming our culture into a customer centric one,”
said Mike Jones, TCF’s executive vice president of Consumer Banking.

About TCF
TCF is a Wayzata, Minnesota-based national bank
holding company. As of March 31, 2017, TCF had $21 billion in total
assets and 331 branches in Arizona, Colorado, Illinois, Michigan,
Minnesota, South Dakota and Wisconsin, providing retail and commercial
banking services. TCF, through its subsidiaries, also conducts
commercial leasing, equipment finance, and auto finance business in all
50 states and commercial inventory finance business in all 50 states and
Canada. For more information about TCF, visit tcfbank.com.

About NICE
NICE (Nasdaq:NICE) is the worldwide leading
provider of both cloud and on-premises enterprise software solutions
that empower organizations to make smarter decisions based on advanced
analytics of structured and unstructured data. NICE helps organizations
of all sizes deliver better customer service, ensure compliance, combat
fraud and safeguard citizens. Over 25,000 organizations in more than 150
countries, including over 85 of the Fortune 100 companies, are using
NICE solutions.

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