Credit Acceptance, CAPS, & New York Litigation
Former Market Area Manager at Credit Acceptance
inpractise.com/articles/credit-acceptance-caps-and-new-york-litigation
Former Market Area Manager at Credit Acceptance
The executive has over 20 years experience in the auto retail industry and is a Former Market Area Manager at CACC. He has since left CACC and is now running an independent dealership and is a large customer of CACC.
Interview Transcript
This is a snippet of the transcript, sign up to read more.
Switching to your role as a customer, you mentioned that a large number of your loans are done with Credit Acceptance, why is that?
The biggest reason is the ease of selling that car. Customers who can buy a car for $25,000 won't go to an average independent dealer to get approved. There is a stigma of not wanting to buy a car from a lesser independent dealer, which is one of the struggles I had as an employee of Credit Acceptance. Dealers have a mental block that Credit Acceptance is less than. Today, being an owner, I see that pay plan process issues are the reason they don't reach their BHAG 600,000 loan goal. Franchise dealers pay a finance manager on back end products, but due to the way Credit Acceptance sets their portfolio profit up, there was no incentive for me as a finance manager because everything was front loaded. I do all the work because a customer needs special stipulations to put the loan together, so it will get moved aside.
This is a snippet of the transcript, sign up to read more.
Are you referring to the dealer hold back that the finance manager feels like there's no benefit to them?
Yes. When Credit Acceptance pays a deal, they have the initial profit which the dealer gets today, potential profit which is what their algorithm says you will get down the road. They also have profit potential which is an over-inflated number, if the customer makes every payment on time. Unfortunately, we already know the customer probably won't satisfy that loan 100%.
This is a snippet of the transcript, sign up to read more.
Related Content
Copyright Notice
This document may not be reproduced, distributed, or transmitted in any form or by any means including resale of any part, unauthorised distribution to a third party or other electronic methods, without the prior written permission of IP 1 Ltd.
IP 1 Ltd, trading as In Practise (herein referred to as "IP") is a company registered in England and Wales and is not a registered investment advisor or broker-dealer, and is not licensed nor qualified to provide investment advice.
In Practise reserves all copyright, intellectual and other property rights in the Content. The information published in this transcript (“Content”) is for information purposes only and should not be used as the sole basis for making any investment decision. Information provided by IP is to be used as an educational tool and nothing in this Content shall be construed as an offer, recommendation or solicitation regarding any financial product, service or management of investments or securities. The views of the executive expressed in the Content are those of the expert and they are not endorsed by, nor do they represent the opinion of In Practise. In Practise makes no representations and accepts no liability for the Content or for any errors, omissions, or inaccuracies will in no way be held liable for any potential or actual violations of laws, including without limitation any securities laws, based on Information sent to you by In Practise.
© 2023 IP 1 Ltd. All rights reserved.