Lenders Survey Shows Delinquencies Down
The Recreation Vehicle Industry Association’s (RVIA) newly released “2004 RVIA Survey of Lenders Experiences” publication indicates that delinquencies were down in 2004 even more than in 2003, and, once again, that the dollar volume of both wholesale and retail loans was up.
The survey, released to the RV and finance communities, concentrated on the largest lenders in each category which together represent approximately 80% of national RV lending activity. Among these large lenders, the retail indirect respondents average 31 years of experience and the wholesale portfolio respondents average 24 years of experience.
The following offers some highlights culled from the latest annual nationwide survey of retail and wholesale lending institutions concerning their RV lending portfolios.
• The dollar volume of RV wholesale loans made in 2004 was $8.3 billion.
• Dollars outstanding as of Dec. 31 totaled $3.69 billion.
• The annualized RV inventory portfolio turns per year was 2.39, and the average units value financed was $38,893.
• The used portion of the average wholesale portfolio was 6.5%; the rental portion was 2.3%.
• Almost all units (96%) were covered by a Manufacturer Repurchase Agreement.
• Seventeen percent of lenders retained the Certificate of Origin (MCO) until paid.
• Lenders averaged 9.5% inspections and verifications of floorplanned units per year.
• Fifty percent of those inspections were performed by in-house personnel and the other 50% by both in-house personnel and an external service company.
• All firms financed 100% of the manufacturer’s invoice.
• The median large wholesale institution had 382 dealerships in its portfolio, over half of which had year-end outstandings of under $1 million.
• The number of retail indirect loans made in 2004 by the large lenders responding to the survey was 139,426, and the total funded was $7.34 billion.
• The number of retail indirect installment accounts outstanding was 422,865, and the total dollars outstanding was $13.42 billion.
• The average retail down payment was 12%.
• Sixty four percent of the retail loans were for new units and 36% were for used equipment.
• The average time on the books for retail loans for towables was 38 months; for motorized RVs, it was 42 months.
• The average paid off retail loan was $20,750 for towables and $50,466 for motorized RVs.
• The reported RV delinquency rate for retail indirect portfolios was .92%, with repossessions initiated after an average of 71 days of delinquency.
• The average percentage of dollars recovered when selling a repossessed unit was 54%, and the annual net charge-off of RV loans to year-end RV loans outstanding was .60%.
• Repossessed units are marketed primarily through RV-specific auctions (75%), auto auctions (75%), consignment (50%), private sale (25%), sealed bids (25%) and classified ads (12%).
• The average maximum maturity was 233 months for both new and used RVs.
• The average minimum amount financed was $96,000 for new RVs and $89,000 for used.
• The minimum down payment was 10% for both new and used RVs.
• Additional items financed include extended warranties (100%), dealer added accessories (88%), tax and license (88%), credit life (88%), disability (75%) and physical damage (38%). The average maximum amount of additional items financed is 14%.
• Loan values for new units were determined by manufacturers’s invoice (100%), guide books (63%), bill of sale (25%) and physical inspection (13%).
• For used RVs, the loan values were determined by guide books (100%), bill of sale (38%), physical inspection (25%) and manufacturers’s invoice (13%).