Finance Sector Firms Improve Efficiency

While the boating industry has seen an up-and-down year with the economy and fluctuation in sales, the state of the retail marine finance sector seems more stable.
With technology improving and companies relying more heavily on the Internet, the retail finance market is becoming more efficient for dealers and their customers.
The ease of financing has improved significantly over the last five years, and finance companies continue to look for ways to make the process of financing easier and less intimidating for customers.
Financial providers are making their services more convenient and effective through Internet-based systems and customization.
“We’re trying to improve our general customer service, and I think that’s what’s happening across the board, said Peter Virvilis, director of project management for boats.com. People are learning and they’re learning from their customers.”
Most of the finance providers we spoke with reported a strong year for this sector of the industry and for their businesses.
Eric Telljohann, specialty group president for Bank of America, said his company had a very strong year. He reported that Bank of America had record retail volume through the first nine months this year.
This year, Ganis Credit Corp, a subsidiary of E*Trade, partnered up with boat builder Genmar Holdings, Inc. to launch a private-label retail marine finance program, Genmar Retail Financial Program.
According to Ed Arienti, vice president of recreational product loans at E*Trade Financial, it has been a superb year with share growth, dollar volume of loans, quality of loans generated, and performance of portfolio all exceeding company expectations.
Positive feedback concerning retail marine finance was also expressed by Virvilis, who happily reported that his company, which offers finance online has seen a better-than 50-percent increase in applications.
“It has been an incredible year for the company,” Virvilis said. “In general our volume is up drastically.”
Richard Strickler, senior vice president of Transamerica described the state of the retail marine finance as robust. He admitted to a late start for the company, but the market really broke open for the company in April with record collection from dealers.
“We’re up 21 percent year over year, and we had a fantastic 2002, so we continue to set records and our business has been very, very strong,” Strickler said.
Use of internet growing
The movement toward ease in the finance department can be largely attributed to the Internet and the role it has taken in this sector of the industry. The Internet now acts as a tool for both consumers and dealers.
On the retail side of things, the Internet allows people to do some research before they ever step on a lot to buy a boat. Consumers are getting more comfortable with using the Internet and this allows them to be more informed not only about the boat they want to buy, but about different aspects of financing including interest rates and promotions.
“Our buying public gets a little more sophisticated every year,” Strickler explained. “They are using the Internet to do shopping before they go out and actually take a look at the product.”
Virvilis, in part, attributes boats.com’s success this year to consumers becoming more knowledgeable about, and more comfortable with, using the Internet for larger purchases.
“One of the luxuries of being a Web site,” he explained, “is that every year more people are becoming comfortable with using the Internet and people use it more. As time goes by, traffic on the Web site is increasing and people’s confidence in buying and using our services are increasing as well.”
Virvilis reports a more than 50-percent increase in traffic to the Web site compared last year.
The boats.com site allows customers to fill out an application online. Once these applications are submitted, customers are contacted by finance professionals. The Internet can also take away the discomfort of the in-person meeting for financing options.
“I think a lot of people maybe feel awkward going in and talking to people about their finances, and are maybe more relaxed when they’re doing it at home because no one is there to drill you with those questions,” Virvilis said.
Lisa Gladstone, president and CEO of Priority One Financial Services, says that the Internet has really opened up this new opportunity for finance customers.
“Potential new boat owners can now fill out credit applications online, which leads to faster processing, and allows the buyer to shop for a boat from his or her home computer,” Gladstone said.
For dealers, Internet-based systems can help manage relationships with finance companies as they are designed to let dealers monitor account information. Among other features, with these systems dealers can submit payments and check inventories quickly, which saves interest costs and time.
CUSTOMIZATION FOR CUSTOMERS
Another industry trend is customizing finance programs for consumers.
In its relationship with Genmar, one of Ganis’ goals is to customize its program for each boat brand’s target audience.
The company hopes to provide programs for different types of buyers and assist Genmar to get into the psyche of borrowers and what services will press their buttons, Arienti explained.
For example, the larger the boat being purchased the greater the appeal of a program that has an attractive interest rate. This may differ from a buyer of a runabout in the $10,000-$30,000 category, who might be more interested in a program that would assist in cash flow or offered no payments for six months.
This goal for customization may even come down to geographics, Arienti explained. For example, offering free winter storage may work for a dealer in the Northeast but not a dealer in Florida.
This customization, they hope, will allow dealers to provide appealing programs for different types of buyers, which is beneficial to the customer as well as the dealer.
— Sara Faber