Gain Control and Visibility of Vehicle Portfolios

Credit unions can increase auto lending profitability by leveraging technology to optimize vehicle collections, from recovery through remarketing.

 

By Don Meadows

 

The jump in repossession volumes, coupled with lower recovery rates and ever-rising remarketing costs, continues to chip away at auto lenders' profitability. While credit unions hold less than 16 percent of the market, auto loans represent an average 38 percent of their overall loan portfolios.

Rather than put the brakes on auto lending, leverage technology to optimize vehicle collections, from recovery through remarketing. For example, several top auto-lending credit unions have implemented an inventory management system (IMS) used by more than 240 auctions nationwide. The web-based repossession and remarketing IMS provides credit unions a single, standardized platform for exchanging, storing and analyzing data across branches and auctions.

Whether integrated with your credit union's internal system for data exchanges or implemented as your core recovery and remarketing system, a web-based IMS automates many labor-intensive tasks. Boost staff productivity and streamline communications with repo agents and auctions by substituting faxes and phone calls with Internet capabilities.

Control Vehicle Collections
During the recovery process, a repossession management system keeps inventory visible and in your control, from agent assignment to secured at auction. Upload business guidelines, track all vehicle record entries and changes, enforce business rules and maintain accountability. Look for a system featuring the following functions as well:

  • Make assignments and receive agent acknowledgements online.
  • Manage agent documents electronically. Upload agent licenses, bonds, insurance certificates, etc., as digital images, and automate document expiration notices.
  • Objectively evaluate agent performance metrics. Measure criteria such as timeliness of assignment acknowledgements, recovery times, charges, etc.
  • Leverage ad hoc reporting tools to analyze data. Run exception reports to track recovery times, charges, and gauge repo agents' performance.

Flow Vehicles Straight to Auction
Almost 87 percent of repossessed vehicles are sold at physical auction, so the ideal IMS integrates both recovery and remarketing. This way, the assigned auction has the upstream visibility of vehicle statuses. Advance notice of pick-up/drop-off instructions, legal holds and release dates, and other information involves auctions in reducing your days to sell.

Other key features to look for:

  • Online visibility and tracking across inventory statuses
  • Direct data feeds to reduce redundancies and errors
  • Integrated forms
  • Electronic CRs with digital images for online viewing and sharing
  • Independent title management functionality
  • Real-time guidebook price feeds
  • Automated floor-pricing tools
  • Expense management tools and exception reporting

Benchmark Individual and Industry Performance
Measuring and managing intervals of key repossession and remarketing processes provide actionable information to reduce days to sell, which in turn minimizes financial losses.

Key process intervals encompass dozens of events influenced by all parties involved in recovery and remarketing - from the average time for agents to acknowledge assignments, to the interval between the auction securing a vehicle and producing a condition report, to how long it takes a credit union to ship a title to auction.

Benchmarking your credit union against its own performance as well as its peers' allows you to identify opportunities for improvement. Reduce cycle times and costs by streamlining processes internally and with agent and auction partners. Over time, you'll also gain the insight into the variables that affect your credit union's cycle times and residuals.

To learn more about how credit unions use AutoIMS.com's recovery and remarketing systems, call (888) 683-2272. Or, e-mail bob.camp@autoims.com to schedule a live demonstration.

 

Jan. 17, 2005


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