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.
Western Funding finances used vehicles up to 15 years in age with sales prices ranging from $5,000 to $50,000. Customers will typically
make down payments, in the form of cash or trade-in, starting at 10% (or $1,000) of the purchase price. The balance of the purchase price
plus taxes, title fees and, if applicable, extended service contracts is financed. Installment contract terms typically range from 12 to 72 months
at origination, averaging 36 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 45%, depending on the risk profile of the borrower and
the age/value of the automobile. Contracts are purchased at a competitive discount, determined by the risk profile of the borrower and
the age/value of the automobile.
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.