Percentage Image

 

In This Issue

3 Big Changes in Lending Guidelines

RVDA Information & Speech

 

Extended Office Hours at Priority One

Team Sebastian

 

Priority One is extending business hours.  Starting January 2, 2011 our office will be open until 7 pm EST weekdays to better serve you, our valuable dealers.

 

 

 

Mon. - Fri.  9 am - 7 pm

 Sat.        10 am - 6 pm

Sun. Closed

 

 

 

 

Meet our New Business Managers

Team Sebastian

Blake Hines

 

Blake graduated from Florida State University in finance.  The start of his career began in the mortgage industry where he

was a mortgage banker and home mortgage consultant. As his career grew, he became a finance manager and has extensive recreational lending and sales experience in the marine and power sports industry.  In his free time he enjoys sailing, scuba diving, golfing, and cheering on the Seminoles.

 

 

Team Sebastian

 

Brad Brown

Brad was a business management graduate and college football player from

Arizona State

University.  Prior to

Priority One, Brad had been a finance manager for a car dealership and understands the challenges dealers face on a daily basis.   In his free time, Brad enjoys spending time with his son, traveling, cooking and cheering on his alma mater, the Sun Devils.

 

Upcoming Events 

Come visit us at the following shows:

MDCE

 We will be at booth #730 at the 2010 Marine Dealer Convention & Expo. in Orlando this November 15-17th.  Hope to see you!

RVIA 

Visit us at the RVIA Convention in Louisville, KY on November 30-December 2, 2010.  Booth #1001 (south wing of hall #1) and booth #3038 (north wing of hall 2A) at the KY Expo. Center.

F&I Insider

 

October 2010

 

 

 

3 Big Changes 

in Lending Guidelines

 

Lenders' programs are constantly evolving and as your business office, we help you stay on top of the many changes and ensure they do not interfere with a smooth delivery.  Here are three changes that Priority One has seen this year.

1.    Revolving Debt  

In the past, revolving debt with a solid history of on-time payments was a positive sign on a customer's credit profile.  It showed that the customer could have increased lines of credit, that they paid well and the lenders would make money if they extended credit to the customers.  Now lenders are looking at that revolving debt more strictly.  The lenders prefer to see customers have under $20,000 on outstanding revolving debt and over 80% revolving usage available.  A customer with more than $20,000 in revolving debt may be seen as a higher risk and may receive a higher interest rate than in the past.  Priority One's business managers work with customers with high revolving debt to discover if any of those accounts have been closed or paid down.  Our business managers ask customers additional questions in order to provide lenders with all the facts.  Common questions that may be asked of the customer include: "Are your debts secured or unsecured" and "Are your debts personal or business?"  This helps ensure the customer has the best chance for a favorable decision right from the start.

 

2.    Debt- to-Income (DTI) Ratios

Between extremely low interest rates and more and more companies offering lower-than-ever pricing, customers are taking advantage of these promotions and taking out more loans.  With every new loan, the amount the customer owes in monthly payments compared to the monthly income, a ratio referred to as debt-to-income, changes.  Lenders look at the debt-to-income ratio differently and each one has a comfort level that they approve. Typically lenders require a DTI of no more than 30-40%.  However, once a lender has a certain DTI standard in place, they don't like to budge and will likely decline a customer whose DTI is out of line.  This is one of the reasons why your Priority One business manager will thoroughly interview the customer to "dig for dollars" and uncover any additional revenue generating business ventures, side businesses, or additional income that could be calculated in this ratio.

 

3.    Down Payment Requirements

You have already noticed that down payment requirements are now quite common.  Sure, some customers qualify for zero down, but down payments are currently the standard.   A typical down payment requirement is 10-20% of the cost of the unit.  There are several reasons the lenders are requiring a down payment as they want to see that the customer is able to afford it.  The lenders feel the customer has a vested interest in the collateral when they put money down.  The benefit of a down payment to your dealership is that it reduces delinquency, repossession ratios, and gives the customer equity when they look to trade in that unit at your dealership.  Your business manager educates all customers on the lender's requirements and explains to them that putting more down increases their chances of qualifying for the loan.

It is no secret that F&I is constantly changing.  While no one can control lenders' guidelines, rest assured your Priority One business manager keeps your dealership ahead of the game and knows how to best work with the new guidelines to move units for your dealership.

 

 

 

RVDA Information and Speech

 

Our very own Vice President of Lending, Lorraine Mariotti, had the opportunity to present at the 2010 RVDA Convention and Expo earlier this month at the Las Vegas Rio Hotel & Casino. 

 

Her presentation, Economic Destruction Requires F&I Reconstruction, informed dealer principals and general managers how to determine their F&I department's strengths and weaknesses within the current lending landscape, how to measure the performance of their F&I department, identify hidden roadblocks and develop solutions to tap into the full potential of their F&I department. 

 

If you would like a copy of her presentation, please email lsmith@p1fs.com.

 

 

Happy Halloween from Priority One!

 

Priority One Financial Services

742 Second Avenue South

St. Petersburg, Florida  33701

800-747-6223

www.p1fs.com

Selling is your priority, financing is ours.