Issue link: https://read.dmtmag.com/i/274927
FINANCIAL 12 • March 17, 2014 • Powersports Business www.PowersportsBusiness.com Octane Lending eases rekeying frustrations to use, while also helping them to more quickly accomplish an everyday task — helping cus- tomers apply for retail financing. The company also began building a network of lenders to offer dealers more options. Critical to Octane Lending's system is its ability to allow an F&I manager to send appli- cations to different lenders without typing the same information multiple times. "What we offer dealers right now is a plat- form that allows dealers to avoid having to rekey information," Guss said. Information submitted to a loan application from Octane Lending's website is encrypted via SSL, in the same man- ner as online purchases. The applicant's personal information is preserved while an F&I manager has an Octane Lending window open, but it's gone forever when the user logs off, so it's never recorded anywhere. "We don't store any information, so noth- ing ever gets written to disk," Guss explained. Any dealer can try the Octane Lending sys- tem for free. So far most of the dealers participat- ing are those near Octane's hometown of Austin, Texas, but dealers in North Carolina, California and the Great Lakes region are also getting on board. As Octane creates partnerships with more lenders, dealer interest is growing, and though new lenders might not be available in some areas, the rekeying feature is universal. NEW FEATURE IN THE WORKS Octane Lending's goal is to have about 250 dealers on board by the beginning of summer. Once that occurs, the group is hoping to have the support to launch another feature — pre- approved loans requiring only one hard credit pull. Though that component wasn't initially in the works, Guss learned of its need after inter- viewing about 200 dealers. "Initially we thought the biggest problem was the annoyance of having to rekey this information over and again, but what we found talking to dealers is they cared more about damaging their customers' credit," he said. Unlike auto or mortgage loans, powersports loans don't have a credit pull grace period, meaning that every loan application incurs a hard credit pull for the applicant. Hard inqui- ries lower a person's credit score and remain on a credit report for two years. That means if one lender denies an application, and a dealer helps a customer apply for a second loan, the customer's credit will be dinged twice. STOCK MARKET WATCH DEALER FINANCIAL SNAPSHOT JANUARY 2014 While Same Store Sales for 1,320 metric and V-twin dealers nationwide were up 10.8 percent overall in January, results varied greatly throughout the U.S. The Northeast was the only region down overall, with an 8.6 percent decrease led by a 10.0 percent drop in service. Conversely, the West reported a 26.3 percent jump overall, while the Northwest increased 20.1 percent, led by sizeable major unit hikes, up 31.6 percent and 30.6 percent, respectively. PARTS SALES In the U.S., 658 dealers were up in parts, and 662 were down. SERVICE SALES 710 dealers were up in service, while 566 were down. MAJOR UNIT SALES In major units, 630 dealers were up, and 485 were down. NORTHWEST 7.4% Parts Department 8.6% Service Department 30.6% Major Units 20.1% Overall MIDWEST 14.2% Parts Department 8.2% Service Department 11.7% Major Units 12.2% Overall NORTHEAST -7.6% Parts Department -10.0% Service Department -9.2% Major Units -8.6% Overall SOUTH -5.9% Parts Department 2.8% Service Department 7.4% Major Units 5.3% Overall WEST 10.8% Parts Department 18.1% Service Department 31.6% Major Units 26.3% Overall UNITED STATES 3.9% Parts Department 6.6% Service Department 13.2% Major Units 10.8% Overall 80 100 120 140 160 180 200 220 240 260 280 300 6/21/13 7/23/13 8/20/13 9/16/13 10/14/13 11/8/13 12/9/13 1/6/14 1/27/14 2/25/14 PSB INDEX* DOW JONES INDEX S&P 500 INDEX Stock Price Percent Company Ticker 2/25/14 Change ArvinMeritor ARM $12.42 32.0% Cooper Tire & Rubber CTB $24.18 7.7% Brunswick Corp. BC $43.70 5.5% Arctic Cat, Inc. ACAT $45.45 5.0% Universal Technical Institute UTI $13.78 3.8% MarineMax, Inc. HZO $14.19 -3.5% TCF Financial Corporation TCB $15.85 -4.5% Honda Motor Corp. ADR HMC $36.24 -4.6% Bridgestone Corp. ADR BRDCY $17.97 -5.7% Intl. Speedway Corp. Cl. A ISCA $32.32 -9.9% MARKET WATCH POWERSPORTS BUSINESS WINNERS AND LOSERS STOCK MARKET ACTIVITY FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: adplightspeed.com/dataservices Change 2/25/14 from 1/31 % Change Powersports Business Index* 297.312 8.30 2.87% Dow Jones Index 140.728 4.18 3.06% S&P 500 Index 125.582 4.26 3.51% See Octane, Page 14 Alternative to multiple hard credit pulls may be coming soon BY LIZ KEENER MANAGING EDITOR When Jason Guss, Daniel Petkevich and Michael Fanfant set out to start Octane Lend- ing, their goal was clear — connect dealers with more lenders and help F&I managers save time by not having to rekey customer information into multiple lenders' applications. Though that portion of Octane's software is getting positive reviews, the company is already evolving in an effort to help F&I departments even more. SOLVING A PROBLEM Before he become a co-founder of Octane Lend- ing, Guss had worked in auto lending, brokerage and retail banking in Capital One's Corporate Strategy Group. Along the way, he discovered that the indirect financing process in the power- sports industry could be cumbersome. He then learned of Dealertrack, a company that helps auto dealers streamline retail financing, and he thought he could build a product that would do the same for powersports dealers. Guss and his co-founding partners then cre- ated Octane Lending in October, using fund- ing from Dreamit Ventures, a venture capital company. The first few months after Octane Lending's founding were spent developing a product that would be easy for F&I managers JASON GUSS Source: Wells Fargo Securities LLC * The Powersports Business Index has been adjusted to reflect the addition of TCF Financial Corporation (TCB). * The Powersports Business Index has been adjusted to reflect the addition of TCF Financial Corporation (TCB). P12x15-PSB4-Finance.indd 12 3/5/14 11:37 AM