Buy here – pay here Collection best practices Presented by david Brotherton Moderator & Consultant NIADA Dealer 20 Groups

David Brotherton is an Executive Twenty Group Moderator and Consultant with NIADA. He moderates several Dealer Twenty Groups whose members are involved in the Buy Here-Pay Here industry and provides on-site dealership reviews, training and consulting services. A regular contributor to industry publications, David also regularly addresses national and regional conferences and conventions supporting the industry. David brings twenty years of experience in sub-prime consumer finance, mortgage sales and operations, collections and Buy Here Pay Here operations to NIADA. He has 12 years experience in the J.D. Byrider system as a consultant and manager where his teams have produced consistently strong sales volume and portfolio growth.

The Best Operators Today Are Still Thriving Today’s environment Highly Competitive Consumers Have Multiple Financing Options Easier To Get New Car Than It Is To Fix Old One Our Best Customer Relationships At Risk Increased Regulatory Scrutiny Continuing To Evolve Consumer Focus The Best Operators Today Are Still Thriving

Best practices Underwriting And Verification Are Critical To Collection Success Verify And Document Ability To Repay Residence Verification Employment Verification NOT A Sales Function Minimum Income & Maximum PTI Qualifiers Be Wary Of Attempted Fraud

Best practices “A Contract Well Closed…..” Full Disclosure – No Shortcuts Dedicated Closing Personnel Detail Both Party’s Rights & Obligations Consequences Of Default GPS/Starter Interrupt Importance Of On-Time Payments Electronic Communication Vehicle Servicing Welcome Call

Best practices Sell The Customer On Benefits Of Recurring Electronic Payments Best Performers Consistently Have High Recurring Payment Penetration Rates Can NOT Be Required Build Into Collection Process Helps To Refine And Define Collection Process Better Resource Allocation PCI Compliance Rules

Best practices Build A Relationship With Your Customer Welcome Call Best Collectors Listen Don’t Make Them Afraid To Talk To You Don’t Be Just Another Bill Account Notes

Best practices Use Compliant Communication Methods Convenient To The Customer Electronic Communications Must Be Pre-Authorized SMS Email Third-Party Disclosure Issues Best Time To Call Do Not Harass

Best practices Deal With Collection Issues Early In The Process Don’t Let Problems Grow – Deal With Issue Now Determine The Real Issue Problem Solving Assume Every Customer Will Need Your Help At Some Point Treat Your Customer How You Would Like To Be Treated

Best practices References FDCPA Restricts Reference Contacts Limited To Locating Customer Third-Party Disclosure Modern GPS Technology Makes Locating Vehicle Much Easier Today Don’t Rely On References To Save You

Best practices Staffing If You Are Going To Overstaff, Collections Is Where You Do It 80-100 Delinquent Accounts Per Collector (Monday Opening) Expect Every Unpromised Delinquent Account To Be Worked Every Day Need Enough Collectors To Do This

Best practices Management & Training Effective Collection Leadership Lead By Example Review Account Work Hold Process To Higher Standard Never Neglect An Opportunity To Train Take Advantage Of Outside Training Opportunities

The Goal Is To Grow/Maintain The Portfolio – Not The Repo Lot! Best Practices Incentive Targets - Balanced Approach To Collection Management Contractual Delinquency Recency Repossession Rate Cash Collections The Goal Is To Grow/Maintain The Portfolio – Not The Repo Lot!

Best practices Payment Assistance Devices Modern Payment Assistance Technology Is A Tremendous Collections Tool Will Drive Contact Helps Identify Problems Early In Cycle Part Of Good Collection Process – Not A Substitute For It

Field calls If you Are Still Doing Field Calls – STOP Far Too Much Downside To Justify Time & Expense Third Party Disclosure Harassment Regulator Focus Issue

Best practices Continue To Invest In Your Portfolio Goal Is To Eliminate Mechanical Repossessions Your Customers Will Need Help With Repairs Robust Service Agreements Policy/Goodwill You Will Probably Fix It Anyway Keep Customer Engaged And Participating In Repair Process Limit Repair Receivables To What You Can Actually Collect As-Is Isn’t

Training Opportunities David Brotherton Moderator/Consultant NIADA Dealer 20 Groups davidb@niada.com BHPH Boot Camps August 9-11, 2016 Dallas, TX