Inside The
Numbers: 2018 BHPH
Benchmarks /
Trends Report
By Kenneth Shilson, CPA
President, Subprime Analytics
I recently finished compiling
the above referenced subprime auto industry benchmarks / trends report for the
20th consecutive year. This year, the
2018 Report contains the following:
1)
Financial
information and ratio comparisons for 2016 – 2018.
2)
Cost
of sales and operating expense comparisons for 2016 – 2018.
3)
NIADA
“20 Group” operating comparisons for 2016-2018
4)
Loss
metrics for 2016 – 2018, including leasing.
5)
Industry
trend graphs for 2014 – 2018.
6)
Narratives
explaining the 2018 highlights and a look at what is ahead!
My
special thanks to SGC Certified Public Accountants and to NIADA “20 Groups” who
again contributed to this Report.
During
the last 30 days I have received numerous telephone calls requesting copies of
this report. Although it is important to
learn what others in the industry are doing from the benchmarks, I believe it is
even more important to:
1)
Compare
your own results with industry and regional peer performance using comparable
data and computations.
2)
Identify
the best practices of the most successful operators.
3)
Understand
the changing industry trends which will impact future performance.
4)
Identify
operating practices which should be avoided (“worst practices”).
5)
Make
corrective adjustments to your own operating practices.
At
the NIADA/NABD Convention and Expo on June 17-20 at the Venetian Resort and
Casino in Las Vegas, I will discuss the benchmark highlights, industry trends,
best practices and identify the most lucrative subprime profit opportunities during
my presentation on Tuesday morning, June 18. Copies of the entire report will be available for
all convention attendees.
In
the interim, here are some of the most important takeaways learned from 2018
performance which I will discuss at the convention:
1)
The
longer length of installment contracts is adversely impacting default rates,
2)
Customer
repayments are not keeping pace with inflation and rising operating costs,
3)
Amounts
financed are increasing, making customer repayment more challenging,
4)
Profit
margins are compressed so cost control is more essential,
5)
Bad
debt losses have increased, which has tightened credit availability,
6)
Now
is the time to evaluate your own business model from a cash efficiency
perspective.
Operators
who want more information and assistance can email me at ken@kenshilson.com or call
(832) 767-4759.
Copies
of the prior year benchmark reports are available for downloading, free of
charge, at www.subanalytics.com.
Kenneth Shilson is
President and Founder of NABD and Subprime Analytics which provides
computerized portfolio analysis for operators and capital providers in the
subprime auto finance industry. Their
website is at www.subanalytics.com
or phone 832-767-4759.