NABD Completes New BHPH Industry Benchmarks Report!
Houston, TX – The National Alliance
of Buy Here, Pay Here Dealers (NSBD) today announced the completion of their annual industry benchmarks for
the year ended 2016 with forward looking commentary
and comparisons with prior years.
Ken Shilson, CPA and the
President and Founder of NABD announced that this comprehensive
report is the 19th consecutive year it has been published. “This
year the report contains 20 Group operating information from both NCM and NIADA, financial results and ratios
from SGC Certified Public
Accountants and loss metrics prepared by Subprime Analytics. Shilson also
provides extensive commentary to
help readers understand the significance of the data. This is the most comprehensive report we have ever published on
subprime auto finance,” Shilson declared.
“Our benchmarks report comes at an important time when competition for the best subprime customers from
independent finance companies,
franchise operators, credit unions and others who are seeking higher yields in
the low-yielding environment of today has been significant. Although BHPH
industry profitability for independent operators was depressed in 2016 by this
competition, better days are ahead
for independent operators who embrace the changes necessary to succeed today”,
“The old ways are not
working like they have in the past so the BHPH industry must adjust to the new
challenges caused by the increased competition.
The adjustments start by understanding the market changes and by comparing your own performance with your peers”,
Shilson explained. This benchmark report will facilitate doing both.
important highlights about the 2016 benchmarks are:
1. Bad debts increased from higher amounts financed (severity), from competitive
pressures which depressed down payments and repayments, and increases in the
allowance for bad debts in anticipation of a new credit loss measurement
standard passed by the AICPA in June 2016.
2. Operations income was reduced by higher operating expenses which
were impacted by additional compliance
costs and inflation, bad debts, and an increased cost of vehicles.
3. Recovery income was reduced by lower yields from the liquidation of repos.
operators chose not to match aggressive underwriting competition
which included longer loan terms and higher cost, newer model vehicles sold and
financed to deep subprime customers.
“Better days are ahead
for operators who are positioned to capitalize on opportunities created by
underwriting mistakes made by others. However, operators must be proactive in
order to regain their lost market share! This requires them to learn and
implement new operating practices, technology, and to learn from the mistakes made by competitors
and not repeat them”.
We will discuss all the
market changes and offer tips and techniques which will help operators face
these challenges successfully during our 19th Annual Conference at
Wynn/Encore, Las Vegas
on May 23-25, 2017. The conference theme is “The Changing World of BHPH” which
features over 65 speakers/experts during this three-day event. Shilson will
discuss the entire benchmark report with 20 Group Director, Chuck Bonano, in a
session on Tuesday May 23rd. For conference information or to
register visit www.bhphinfo.com.
“Copies of the
benchmarks report will be distributed to attendees of the conference and
advanced copies will be made available only to those who register for this
important event”, Shilson said. Operators can’t continue to do the same things
and expect better results! It’s time to adopt some
new operating practices.
Kenneth B. Shilson, CPA, is President of Subprime Analytic, www.subanalytics.com, a
consulting company that provides
subprime portfolio analysis services. Subprime Analytics
utilizes state-of-the-art data mining and extraction technology in order to
identify loss trends and areas for underwriting improvement. Questions can be
directed to him at email@example.com, or by calling (832)767-4759. Ken Shilson is also the
founder and President of the National Alliance
of Buy Here, Pay Here Dealers (NABD) – www.bhphinfo.com who will hold its 19th Annual BHPH convention on
May 23-2, 2017 at Wynn/Encore in Las
Vegas. The conference will focus on “The Changing
World of BHPH”.