<h2 class = 'uawtitle'>Auto Finance Leads And The Major Effect Of The Upward Market On Your Bottom Line</h2><br />
<div style='font-style:italic;' class='uawbyline'>by Aaron Grant</div><br /><br />
<div class='uawarticle'>A mixture of anxiety and excitement gripped both investors and prospective car buyers alike following recent reports of a spike in special finance lending in the automotive industry. Subprime lending refers to short-term financing for borrowers with low credit scores (challenged credit). Generally, risky borrowers with credit scores of less than 680 find it difficult to obtain car loans from mainstream financial lenders. However, this trend is slowly shifting according to a recent report from a conference hosted by Standard & Poor's Rating Services. During the conference, it emerged that US investors bought close to $5.8 billion in asset-backed securities from auto lenders in the first quarter of 2012. This figures stood at $3.5 billion during the same period in 2011, denoting substantial growth in the industry since last year.<br />
<br />
Sub Prime Auto Loans Rise<br />
<br />
Experian Automotive, which is a branch of the Experian Credit Bureau, has also recently released figures which show the rise of deep lending in automobile industry. Its figures show that in the first quarter of 2012, almost 23% of all car loans issued to new car owners in the US were subprime loans. The same figure for the year 2011 was 21%. For used car loans, the figures for 2012 and 2011 were 57% and 55% respectively. These figures show a rise in lending for used car, as well as new car loans.<br />
<br />
The lower interest rates for subprime loans are also an indicator of the growth of this market. The report from Experian shows that even customers with very low credit scores (also known as deep borrowers) have to pay an average interest rate of only 17.9% on their loans. The figure for customers with very good credit score (also called super-prime borrowers) is 4.4%. When these figures are converted to monthly payments, the deep non-prime customers have to pay a monthly payment of $356, whereas a similar loan by a super-prime borrower needs a monthly payment of $345.<br />
<br />
Based on FICO's survey results on non-prime loans, lenders are open to entertaining applicants with credit scores below 680. Despite this willingness, just a quarter was optimistic about the growth of this sector. If any progress will be made, though, they point to auto loans as the probable source.<br />
<br />
The Driving Force<br />
<br />
There are many theories surrounding the recent extraordinary rise in auto financing. Most observers point to low-cost funding as the primary reason for this trend. Before the US spiraled into the recent downturn, acceptance to a car loan was incredibly difficult to come by despite impeccable credit scores. Now that people are avoiding subprime mortgages like a plague due to its disastrous results, lenders are shifting their efforts to auto loans to attract wary clients back to the fold.<br />
<br />
Another thing which contributed greatly to the development is the return of gas prices to tolerable levels. Around the height of the credit crisis, the cost per gallon skyrocketed to incredible amounts which made prospective car owners defer their purchases. Now that prices have become so much more reasonable, the demand for automobiles is surging and every lender is trying to attract as many to use their loan services.<br />
<br />
Lastly, fewer chances of delinquencies are also a contributing factor to the rapid growth of the special finance lending market. According to Equifax, car loans record fewer delinquencies than other major types of financing including mortgages. The apparent need to travel to and from work daily, gives people the impetus to make their monthly car payments without fail.<br />
<br />
Lead Generation Techniques Utilized By Car Sellers<br />
<br />
The growing demand for vehicles and high availability of financing options creates a need for auto finance leads generation among dealerships. Effective lead generation techniques are likely to bring in more customers in need of credit to finance new or used cars to ones storefront. Today, online lead generation is the primary mode of attracting prospective buyers, albeit old school sales tactics are also commonplace.<br />
<br />
New Lead Generation Techniques:<br />
<br />
Newspaper Classified Advertisements: Some dealerships still utilize this old school method of making offers to customers. The target customers here are mostly over fifty retirees in search new or used vehicles.<br />
<br />
Radio and TV Advertising: This expensive method is mostly used only by larger dealerships that are in a partnership with carmakers. It mostly targets people working from home, as well as housewives.<br />
<br />
Banners and posters: These traditional methods of promotion are effective at targeting local customers to the dealership in small towns and communities. Public display ads are placed in areas where locals hangout or visit often.<br />
<br />
Internet lead generation: Online lead generation for auto financing is the most touted of all lead generation techniques. This is mainly because of the leveraging power of the internet that online lead generation companies use to collect customer data. For instance, such companies can target auto-sales websites, used car domains, online banner ads, pay-per-click ad copies, online displays and other forms of online advertisements, to track prospective customer's details. This information may prove useful in separating likely car buyers from general shoppers in the market. However, online lead generation websites usually sell their information to car dealerships, making the technique quite expensive for small-scale dealerships.<br />
<br />
Overall, the industry is upbeat about subprime auto loans due to many factors that are seen to contribute to their success.<br />
<br />
</div><br />
<div class='uawresource'><br />
<div style='font-style:italic;' class='uawabout'><br />
About the Author:<br />
</div><br />
<div class='uawlinks'>Be careful is your considering purchasing <a href="http://tinyurl.com/cozb3kd">Auto Finance Leads</a> for yourself. Visit <a href="http://tinyurl.com/8dlzubw">Here</a> before you do anything, and request a free consult</div><br />
</div><br />
<hr><br />
<p>You are receiving this because you signed up for it on 2012-03-18 from IP 108.66.210.38</p><br />
<p>To fine-tune your selection of which articles to receive, just <a href='http://www.uniquearticlewizard.com/bloggers/'>login here</a><br>using your username: </p><br />
<p>To unsubscribe please use the following link:<br><br />
<a href='http://www.uniquearticlewizard.com/unsubscribe.php?mail=kelvinrogersholdings.empowered@blogger.com&code=36575044a9355309bd227467121a74cc'>Unsubscribe</a><br />
<hr><br />
<br />
---------------------------------<br />
New Unique Article!<br />
<br />
Title: Auto Finance Leads And The Major Effect Of The Upward Market On Your Bottom Line<br />
Author: Aaron Grant<br />
Email: alipski@leadbidinc.com<br />
Keywords: Auto Finance, Leads, Sub Prime, Dealership, Special finance, ,Auto Dealers, Lead Generation,Marketing, Auto<br />
Word Count: 864<br />
Category: Marketing<br />
---------------------------------
No comments:
Post a Comment