Here Pay Here Credit Lines

ing fraud perpetrated at the time of origination. Yet 74% of lenders have programs in place to track fraud at the time of the loan origination.

An overwhelming majority of lenders surveyed believe that early payment default is an indicator of origination fraud. Approximately 67% of lenders’ fraud loss may be buried in early default losses.

The report also showed that 35% of lenders indicated that their front line staffers are not trained or prepared well enough to investigate or identify fraud.

This is a significant opportunity for the industry to improve, according to Point Predictive.

The majority of lenders are not currently using services like eCBSV to verify borrower social security number. Only 29% of lenders reported using the service.

The majority of lenders (59%) indicated that dealer-perpetrated fraud is a serious concern to their organization while 41% indicated that it is not.

About half of lenders believe that less than 10% of fraud can be attributed, however close to 20% of lenders believe that 1 in 5 frauds are perpetrated at the dealer level.

Respondents indicated that manipulating customer data is more prevalent than manipulating vehicle data.

Point Predictive’s report revealed dealer fraud can result in a very high number of dealers terminated at certain lenders.

Ten percent of lenders reported terminating 50 or more dealers for fraud in the last year.

Sixty percent of lenders require their dealers to repurchase loans with fraud and EPD (early payment default), while 26% of lenders have set contractual obligations for repurchase but they rarely enforce it. About 15% of lenders said they never require dealers to repurchase fraud/ EPD loans.

The majority of lenders believe that between 1% and 10% of pay stubs are forged or fabricated however some lenders believe that 1 in 5 pay stubs are forged.

For most lenders, dealer onboarding takes a significant amount of time with 1 in 10 lenders reporting it can take over 1 month.

The survey showed 45% of lenders take less than two weeks to onboard a dealer while another 45% take between two weeks to a month to onboard a dealer.

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“We want to be in this digital auction space and compete with all these other companies but we want to do it our way and we know what works,” McConkey said

To keep up with sea change, State Line also revamped its efforts since condition reports and post-sale inspections (PSI) became even more critical for the online world.

To add further buyer confidence, State Line instituted a policy for online sales involving PSIs.

“Anything that gets sold online with a greenlight automatically gets a post-sale inspection because you’re not here yourself,” Henderson said. “So that means we’re doing PSIs on 40% of the entire sale.”

The PSI department put cars on one of five lifts to get a full inspection from leaking fluids to the frame.

Going the extra mile has made a difference for their customers.

For Manheim, growing the comfort level for online buyers means boosting CRs and imaging.

“We have this audacious or aspirational goal of making it better than being there,” Hallowell said,

“We want to be able to provide enough information that it’s almost better than walking next to the car.”

One way they are doing this is producing diagnostic trouble codes for all cars onsite and offsite, putting them on the listings.

“We’re also making a big investment in what we call our fixed imaging tunnels,” Hallowell said. “It will ultimately lead to A.I. generated damage assessments.”

The drive thru tunnel is lit up and has 44 cameras that scan the car with high resolution photos from every angle.

“We also have undercarriage scanners that we’ve added, so that you can see an undercarriage view of the vehicle,” Hallowell said. “It tells a dealer whether it’s a clean, Southern car or one that lived in the Northeast with salty roads.”

He added the CRs are also being upgraded with high resolution images of damage and descriptive elements of that damage.

Hallowell also imagines that A.I. will play a role in improving CRs in the future.

Sellers also need accommodation in a digital world.

Digital sellers benefit from Manheim’s size, Hallowell said.

“The strength and size of our mar- ketplace gives us, roughly, a 2% premium to the market,” he said. “It’s pure supply and demand economics.”

MAG is upfront with sellers ahead of time to tell them where their liability ends and where it begins, which mostly centers on titles for these older cars, McConkey said.

“We don’t really run anything asis,” McConkey said.

“We’ll still run a car with a green light, even if it’s a $500 car that’s 25 years old. We’ve just got our inspection to a place where we can really trust it and stand behind it.”

McConkey said the biggest learning curve was seller expectations.

“We’re learning from (other online sales platforms) that they have zero skin in the game as far as representing their car,” he said. “The view is, we inspect it therefore, anything that’s not exactly like we said it would be is not their problem.” time it’s personal (information, that is). News

It’s difficult because there are always things that are hard to catch, he said. But some who sell to customers want to sell a car and never think about it again.

So, that’s informed MAG’s policy and approach to how it does inspections.

On the buyer side of a MAG sale, the expectations are higher than a physical sale, McConkey said.

“Ultimately, things that normally our arbitration team – per our physical auctions – would say, ‘That’s not a covered item,’ we’re saying that’s covered on MAG Now,” he said.

“The standards are just higher.” partners soar above risk with access to new technology, more secure connections, and third party partnerships like Privacy4Cars.

All-around customer service remains crucial.

After every digital purchase, America’s Auto Auction reaches out to the dealer, asking them about their experience, what they liked, what they didn’t like, McAllister said.

“You’ve got to be open to that feedback though, because it might not all be positive,” McAllister said.

Despite working on the digital side, McConkey and Henderson both believe in physical auctions and the brick-and-mortar model. They don’t see it going away.

Henderson still enjoys sale day at the auction.

“Even as a digital sales manager, nothing makes me happier than seeing the faces of the dealers walk through the building,” Henderson said.

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