Despite a nationwide downturn in the RV industry and the departure of several key lenders, Priority One Financial Services Inc. reports that the percentage of loan approvals they generated last year is equal to 2007 totals.
The company, acquired by Forest River Inc. in April 2007, said it works on behalf of RV dealers to submit loan applications to specific lenders based on the borrower’s credit history and the lenders specific requirements. By outsourcing this important finance and insurance role, dealers “can get more loans approved faster.”
“Through our continuous development as well as our relationships with lenders we have seen our approval ratio remain the same from 2007 to 2008 which is actually a 7% increase from 2006,” said Leigha Taber, marketing coordinator for Priority One Financial Services. “What makes this so impressive is that we, like other dealers, have seen some of our strongest lenders leave the market during this time. Additionally, with automatic approvals no longer being an option, every approval is more and more difficult to obtain.”
According to the St. Petersburg, Fla.-based firm, it has also seen an increase in dealer gross margin of about 4% on every deal. “To dealers this means an increase of $100 per deal in their pockets over 2007,” said Taber. “With fewer units being delivered this extra profit can really make or break a dealership. Whether we handle the financing, sell an extended service contract or any other back end product, the dealer makes extra profit that they wouldn’t on their own.”
Taber said Priority One has seen a slight decrease in total application numbers last year, compared to 2007. But the percentage of loans being approved by banks has not changed.
“With fewer customers coming through the door, dealers truly need to capitalize on every customer that does want to buy,” Taber said. “Given the current environment with lenders leaving and automatic bank approvals being a thing of the past, we have put a lot of focus on continuous sales and approval training of our certified business managers to make sure they can be effective advocates for dealers.”