Driving growth and value: how it benefits you
Published Aug. 2017
By Robert Castillo
Growth in total retail penetration has been a top priority for GM Financial in 2017. GM Financial’s total retail penetration has increased to just over 44 percent up from approximately 34 percent in 2016. As the captive lender for GM, we are uniquely positioned to provide value and benefits to your dealership that other lenders cannot. With factory-supported rates for lease and retail, GM Financial offers the only lease featuring factory-rate subvention and finances 100 percent of subvented lease and APR contracts for GM dealers in the U.S.
The expansion of the General Motors Down Payment Assistance (DPA) program has played an integral part in the gains we have seen thus far in 2017. The incentive, available to customers who finance with GM Financial’s standard rate program, provides improved APR structures by reducing the amount customers need to finance. This arrangement qualifies more customers through lower LTVs as well as increases F&I product penetration. With these incentives combined with our experience in non-prime financing, GM Financial’s average FICO score is the lowest of all captive lenders and GM’s market share of <620 FICO is consistently near the top of the industry.
Shifting the credit mix
Additionally, DPA assists GM Financial in growing a balanced credit portfolio of business more representative of a captive as illustrated above, resulting in a stronger credit mix coming to your dealership. Today, approximately 75 percent of our North America retail and lease originations are prime, which is similar to levels of other established captive lenders.**
A larger, better-balanced portfolio also provides GM Financial the opportunity to further support your nonprime customer sales. While the percentage of customers prepaying early does increase with DPA, the net effect results in more customers inside your dealerships. These positive experiences yield more satisfied customers, which create future sales opportunities when the customer returns for his or her next vehicle. The shift to a strong prime origination mix has lessened net charge-offs and delinquency rates.
Our growth is your gain
Expansion of our market share allows GM Financial the opportunity to provide a captive servicing experience for your customers that ultimately adds value for your dealership. GM Financial customers are more likely to return to the GM brand and your dealership. GM currently has an industry-leading 79% and 67% loyalty rate among current GM Financial lease and APR customers, respectively*. These rates are even higher than return customers serviced by banks and credit unions.
Combined with an exclusive source for GM company cars, rental vehicles and GM Financial Off-Lease inventory, as well as a dealer rewards program that is built for your growth, doing business with GM Financial has never been more beneficial for your dealership.
Value added investment
GM Financial’s investment in customer experience, lead generation, and customer retention represents a commitment to supporting your future sales.
We have enhanced the simplicity of working leads by also sending leads to the GM OneSource Lead Pipe where all leads can be worked from a single location. We are also continuously increasing the number of leads sent to dealerships with the goal of 100,000 leads per month sent to dealerships by the end of 2017.
Additionally, the introduction of our Online Credit Application (OCA) has helped drive more customers to your dealerships with even more enhancements on the way
As we continue through 2017, we are committed to maintaining our momentum toward becoming an industry leader among captive lenders while driving growth in your dealerships.
*Based on HIS Markit Lease and Retail Return to Manufacturer Loyalty data in the U.S. of General Motors vehicles, during the 12-month time period of January – December 2016.
**As of June 30, 2017. “Prime” is defined as a bureau score of 680 and greater.