For years, dealers have been skeptical about finance company's reserves as many of them have never received the reserve that they had anticipated. Payment Sharing is a no reserve program - a straight discount of the face, with an agreement that WFI will pay the dealer 25% of each payment received during the month [does not include late charges, warranty premium payments, insurance settlements (unless payment in full) or proceeds from the sale of a repossession] and paid to the dealer by the 10th of the following month as long as the customers are paying. There is no dealer reserve to be concerned about, therefore the dealers only concern should be that their customers continue paying, because 25% of every payment paid by their customers is additional income to the dealer.
Both the dealer and WFI have an investment in each contract we purchase. The dealer has an investment in what they paid for the vehicle and their cost to sell that vehicle. WFI has an investment in the amount we paid the dealer to purchase the contract. WFI will earn only if the customer pays. The dealer has recovered the majority of his costs of the vehicle from the customer's down payment and what he was paid by WFI when we bought the contract. The dealer is now waiting on additional profit.
The dealer can build an ongoing monthly cash flow from their customers' monthly payments as long as the customer continues his payments. If the customer trades the vehicle and/or pays it off, the dealer also receives 25% of the payoff.
No longer does a dealer have to wonder when they are going to get reserve from the finance company. They will receive 25% of the customers' payments each month. Assume a dealer sells 10 contracts a month with an average monthly payment of $250.00 over a period of 12 months. At the end of 12 months, the monthly payments would be $30,000.00 per month with the dealer receiving approximately $7,500.00
Some finance companies offer the dealer 70% or 80% front money, but is that really the best deal? If WFI purchased a hard to place contract for 55% and paid the dealer 25% of the payments for a 36 month term, the dealer would be getting approximately an 89% return for that contract. The program we are offering is a limited recourse program. After the customer makes three full monthly payments, the dealer is under no obligation to repurchase the contract.
Western Funding has specialized in purchasing hard to place contracts since 1962! With all that experience, we realize what the industry needs is a stable and reliable way of paying the Loss Reserve Holdback to the dealer. Payment Sharing is something a dealer can depend on, month-in and month-out. Dealers do not mind waiting on their profit if they know they will get it from their customers' monthly payments.
No longer is the dealer in the dark as to the status of their accounts with the finance company as you will have 24/7 internet access to your accounts through our Portfolio Access Program.
Western Funding Inc. reports to all three major credit bureaus.