CitiFinancial Auto - Experience, Commitment and

Dedication to Subprime

With over 30 years of history in the subprime market, CitiFinancial understands how this business cycles. “We’ve been here a long time. We know the business. We’re not in and out of the business, so that, I think, is important,” stated Kim Pulliam, senior vice president of sales and operations at CitiFinancial Auto. “We’ve been through many, many cycles, so we know what they look like.”

Subprime financing has always been the focus at CitiFinancial Auto and “continues to be,” Pulliam said. Regarding the subprime market, she added, “It’s interesting because it’s been a critical growth avenue for dealers over the last 15 to 20 years, and I think it’s even more critical in this environment than ever.

“From a consumer perspective, access to credit to purchase an auto is critical and probably in greater demand today. … When subprime began to grow pretty nicely about 20 years ago, dealers were figuring out that they could reach much more of the market by having subprime programs … It’s critical that dealers continue to focus on the specialty part of their dealership now more than ever before.”

Today, Pulliam acknowledged many dealers are finding it more difficult to get deals bought. The law of supply and demand comes into play. “While the need may be the greatest, the supply of the credit availability is just not what it used to be because of the economic environment and the capital environment.” She suggested dealers really work to develop partnerships with the finance companies they do business with. “It’s critical [dealers] understand each of the lender’s programs and what that lender is able to do and not able to do so that if there have been changes in the programs, those dealers are very in-tune with [the programs].”

While it can be difficult for dealers and finance managers to cultivate partnerships with every finance company they work with, it is wise to focus on developing strong relationships with a core of at least three to five subprime finance companies. Pulliam suggested finance managers who submit deals to Citi spend time with their sales reps to better understand their programs and what they’re looking for.

Generally speaking, they first look at the customer’s credit profile and then at the structure of the deal. Pulliam also said they look at the collateral and the equity the consumer has in the deal. Pulliam stated, “We’re going to start [by looking at] the creditworthiness of the consumer. Then we’re going to look at – based on their credit availability and their income level – what can they afford, because we have no interest looking at a transaction where it’s too much for the consumer to handle. Especially in this environment, you just have to be really focused on that.” She added that Citi reps actively look for ways to work with finance managers to rehash deals that might need a little more money down or less vehicle so the customer has an affordable payment and the dealer is able to turn a profit on the transaction.

“Each deal is unique and that’s why we find it so critical to have the infrastructure to both provide local sales [and] dedicated buying … Our buyers are there to provide dedicated service to the dealership and work through the deals one by one,” said Pulliam. The company’s commitment to the industry encompasses about 6,000 partnerships with franchise and independent dealers, which CitiFinancial Auto representatives regularly work with to review deals to determine whether they are a fit for the company.

Like the sea, the subprime market has high tides and low tides, and management at CitiFinancial Auto realizes this. Pulliam said, “We’re going to ebb and flow a little bit, and we have to take care of our company for the long-term because it’s very important that we be here as well … It really takes two in this business and we [the dealer and the finance company] have to understand each other and that comes through communication. I think we’re set up structurally … to really drive that communication and hopefully take full advantage of that.” For more information on CitiFinancial Auto, call 888.760.2886 or visit www.CitiFinancialAuto.com/Dealer.asp.