Auto Loan Programs
Western Funding's loan programs for used vehicles are geared towards the sub-prime borrower unable to access traditional lending credit
because of the age of the vehicle being financed or the customer's employment and credit history. In making credit decisions regarding
the purchase of a contract from a dealer, the Company considers the following factors related to the potential borrower: place and length
of residence; job status; history in making auto installment payments; current income; and credit history. In addition, the Company looks
at prior experience with the dealer from which the contract is being purchased and the value of the automobile in relation to the loan
and the term of the contract.
A typical vehicle financed by Western Funding is five to ten years old and sells at a price between $4,000 and $10,000. Customers will
typically make down payments, in the form of cash or trade-in, from 5% to 20% of the purchase price. The balance of the purchase price
plus taxes, title fees and, if applicable, extended service contracts and insurance, is financed. Installment contract terms typically
range from 12 to 42 months at origination, averaging 32 months. The Company's loan receivables carry an average contract annual
percentage rate (APR) of 23%. Western Funding purchases contracts from dealers at discounts ranging from 10% to 50%, depending on
the risk profile of the borrower and the age/value of the automobile. However, the advance never exceeds 115% of wholesale book
value and is limited to 100% of that value.
Collection Practices & Policies
Western Funding utilizes a multi-faceted approach to loan servicing by combining branch staff collectors and home office collection
staff. Each staff member possesses a minimum of two years experience in sub-prime auto loan collection at the time of hire. The branch
staff is responsible for the collection work to 60 days delinquent; accounts more than 60 days past due are serviced by staff at the
home office. All accounts in repossession are the responsibility of a special collection team, also located in Las Vegas. Through the
use of targeted calling campaigns initiated on the first day of delinquency, Western Funding has effectively lowered overall delinquency.