Tidewater Motor Credit

February 2008 bankruptcy filings spiked and were reportedly the highest in a single month since the 2005 law changes. This is a cause for celebration at Tidewater Motor Credit (TMC). Celebration, you ask? Absolutely! TMC specializes in open Chapter 7 bankruptcy business.

TMC has been in business since 1992, but it began carving a niche in 2000 by making auto loans possible for recent Chapter 7 filers. If your dealership does any subprime business at all, then you are aware of recent lending trends and may be looking for a way to boost or supplement your subprime department.

Recent statistics show that approximately 30 percent of bankrupt individuals purchase an automobile within 30 days of discharge, and roughly, 70 percent purchase within a year of discharge. Where are you? Your competitors are beating you to the punch in this market, and Tidewater is helping them lead the way. Industry experts are predicting between 1 million and 1.2 million bankruptcies to be filed in 2008. At these numbers, even one percent could generate more business than you could imagine. In order to stay ahead of the game, the time to fine-tune a program in your dealership that targets this market is now.
  
TMC’s general lending criteria allows for advances up to 120 percent of NADA trade value plus title, tax and license up to 140 percent out the door, with average fees of around $395 and rates as low as 12.95 percent. The plan is competitive, designed for limited discounts and larger advances, and offers a way to aid those who were once prime credit customers.

TMC is also one of the few remaining relationship lenders left. While they do not have field representatives in all areas, TMC strives to provide one-on-one service to its dealers by assigning each dealer to a buying team in an effort to develop a long-lasting relationship.

TMC doesn’t use an internal scorecard nor do they have a minimum FICO score, but instead evaluate each deal on an individual basis, looking for some positive pay history in the customer’s past as well as stability and ability to pay. TMC wants to see those 500 to 540 FICO scored deals that other lenders are denying. Many of these customers have good jobs with good incomes and have shown that their credit problems are behind them. TMC strives to educate each dealer on a deal-by-deal basis to assist them in the ability to recognize a TMC deal. TMC wants to put together those deals that make sense and will consider multiple autos, equity deals and first-time buyers who have a stable job in a field that can become a career.

TMC’s program allows you to deliver and be funded on an open Chapter 7 customer after the 341 meeting has been held with no recourse. Other similar programs in the industry require recourse on the deal,  as well as a guaranty for the first two payments to be paid on time. Target the recent Chapter 7 filer with a piece of direct mail explaining to the debtor that you are aware they are in a bankruptcy and that they have options available to them in purchasing a new or late-model used car. If you would like to look into some direct mail programs, the marketing dept at TMC will be glad to give you the name of some mail companies that some of our top accounts have had success with.

The Chapter 7 filer is struggling with two things: what to do with their vehicle that is worth much less than what they owe and the need for daily transportation. In many cases these customers had something stretch then beyond their means, such as a job loss or medical situation. If your mailer is right on time, it can help them make the decision to give up their current vehicle in the bankruptcy and take advantage of your offer. Our program ends the nightmare of you and the customer dealing with negative equity. Once they have cleared the bankruptcy, many customers still have the ability, stability and the capacity to become a quality credit risk again.

TMC serves both franchise and qualified independent dealerships in approximately 30 states throughout the U.S. TMC is a privately-held company based out of Virginia Beach, Va., and currently services all of its loans from this location with approximately 300 employees. Our underwriting team consists of 12 buyers with a combined total of more than 150 years in the auto credit industry. If you are interested in learning more about TMC, contact us at 800.216.6862, extension 6932.