F&I Consult

Since the credit crunch starting in 2008, auto finance industry is changed forever.  The new world of auto finance makes it more challenging for auto finance from many different perspectives.  These changes will require auto finance companies to think differently how they fund their business, how finance offerings are structured, how to manage their customers, and how technology enables new processes.

For many years Asset Backed Securitizations (ABS) was a very efficient and effective way for auto finance entities to fund their business.  ABS transactions were the “Great Equalizer” for small and mid size auto finance companies to fund their business.  The market changes that came out of the credit crunch has made funding a auto finance portfolio much more challenging  especially for non deposit based companies and those offering sub-prime loans.

In addition to changes from an auto finance funding perspective, the regulatory environment has had an impact on auto finance entities and will have a greater impact in the years to come. The impact from a regulatory standpoint has impacted:

• Programs that are offered at dealerships
• The overall F&I closing process at the dealership
• Disclosure requirements for dealers and lenders
• Collection practices
• Contracting processes

The new Consumer Financial Protection Bureau (CFPB) will ultimately have at least indirect oversight of much of the auto finance lenders and ultimately could have more direct oversight.  This will require all organizations involved in auto finance to be properly focused on how programs are offered to dealers, the overall customer experience, proper documentation and transparency of the customer finance structure, as well as overall reporting requirements.

As the market is changing from a funding and a regulatory perspective, technology continues to evolve from a dealer and lender perspective.  The internet provides consumers different processes for research and information and with the explosive growth of SmartPhones, much of this information is available in real time as customers are shopping for their cars. The changes in technology have evolved the auto finance business in part of the past decade to move away from “blast faxing” credit applications to lenders to electronic submission and decsioning of credit applications.  The vision of a true e-F&I office will come to fruition when the processes for e-contracting of lease and finance agreements are implemented along with the e-contracting of aftermarket products.  By implementing e-F&I offices at the point of sale for auto lenders, it will result in lower costs, better service to the dealer and consumer, all resulting in a stronger auto finance industry.

Intersection Technologies, Inc. –  F&I Consult business understands the changing market place and how to help auto finance companies start or evolve their business.  We have subject matter experts available for consulting engagements in the traditional core parts of the auto finance business such as credit risk management, remarketing, and sales and marketing, and collections. But based on the changing auto finance market, we have subject matter experts in areas such as:

• Social media
• E-contracting
• Regulatory Changes and Management
• Funding Strategies for the Post Credit Crunch Environment
• New Web Based Technology Architectures
• Operational Performance Excellence