Last month in Fort Worth, DRN gathered 20 executives from the top auto lenders across the country for the second annual DRN Lender Roundtable. And while lenders also enjoyed a night out at the rodeo watching the country’s top bull riders, the issues competitive issues facing the lenders are no bull.
The topics were often heated and always top of mind for these lenders who are facing challenges that range from the rising rate of charge-offs to pressure to improve portfolio returns. Jeremiah Wheeler, Vice President Financial Services for DRN, shared insights from the Roundtable.
What was your main takeaway from the day?
“All of the lenders are being challenged to be more competitive – they are buying deeper and lending more with longer loan terms. And as result, everyone is experiencing more charge-offs. In the last 24 months, outstanding auto balances have grown along with portfolio sizes. But too often, that means that delinquencies and charge-offs also go up. The lenders are forced to staff up, hire more skip tracers, and more collectors. The result? The sheer cost of risk increasing.”
How does DRN respond to these challenges?
“We are offering lenders a way to address these challenges from default to recovery using DRN’s Vehicle Location Intelligence. We even discussed a future where the lenders could add DRN’s Vehicle Location Intelligence to other rating factors at origination to write more, better loans. But right now, lenders are using our data insights to decrease charge-offs and find more cars earlier; they are locating customers with our location reports that provide new addresses and phone numbers for making contact.”
What do lenders have to say about their results with DRN?
“These lenders told us that DRN is having a measurable impact on their operations. Lenders enabling DRN’s Vehicle Location Intelligence on all repossession accounts are seeing a double-digit reduction in charge-offs, and they are increasing their recovery rates related to LPR by 20% and sometimes more. And they tell us that this is information they simply can’t get anywhere else – DRN’s Vehicle Location Intelligence is a game changer for them.”
Was there any competitive tension in the room?
“Sure there’s always a little tension – these are competitors. A few didn’t speak out and we definitely had a few sidebars around what they are doing, and are planning to do to get a leg up on their competition. It just goes back to what we said earlier – the competition is fierce with these guys. They all had a great time socializing but ultimately, they are all driven to succeed and are looking to DRN to help make that happen.”
