Trends in Auto Financing
According to Experian’s State of the Automotive Finance Market Report, roughly 30% of all new car purchases use some form of residual based financing. Your borrowers look to you for the best rates on conventional loans, but have been forced to captives and your competitors for alternative low payment financing, until now.
The Solution for Financial Institutions
AFG offers an intelligent solution by providing a user-friendly, customized web-based calculator designed to make it easy for your financial institution to offer low payment financing to your borrowers. Through a simple process, AFG’s technology determines the vehicle’s balloon payment and residual value by term. The program also works for indirect lending. The AFG Balloon Lending program has on-going, in-depth support and numerous options for financial institutions and their dealerships.
The AFG Balloon Lending program is the ultimate win-win situation – your consumers get great value from a financial institution they trust, and you get increased loan volume and higher yields.
AFG Balloon Lending Program Benefits
- AFG’s Balloon Lending program positions your financial institution to recapture consumer loans currently being lost to competitive residual based financing products through a solution that carries your brand name
- More interest income for your financial institution due to higher average daily balances
- 100% of the residual value is guaranteed to your financial institution by AFG on new and used vehicles with no end-of-term hassles. Auto Financial Group handles disposition of the vehicle
- AFG provides initial and on-going training for the balloon lending program in addition to marketing support
- You can advertise the AFG program’s low payment to build showroom traffic
- Lower monthly payments for your customers lead to more gross for your dealership
- Market differentiator: offer your consumers one more financing option than the competition
- Closing tool for managers: do not lose the customer and another car sale
- No cost to the dealership
- Ownership benefits because vehicle is titled in borrower’s name, giving them more options at and prior to loan maturity
- No down payment required and no prepayment penalties
- Lower monthly payments – up to 40% less than conventional loans
- Plenty of options at any time during or at the end of term, including:
- Refinance remaining balance and keep the vehicle
- Sell vehicle privately
- Pay remaining balance in full and keep the vehicle
- Trade vehicle in to a dealer
- Borrower can choose to surrender vehicle to AFG at loan maturity in lieu of paying the final balloon installment
Avoid the Negative Equity Revolving Door
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AFG Balloon Lending Program Brochure
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