Hometown Auto Retailers Enters Agreement with Universal Underwriters
26 September 2000
Hometown Auto Retailers Enters Customized Financing Agreement with Universal Underwriters Acceptance Corp.
WATERTOWN, Conn.--Sept. 26, 2000--Hometown Auto Retailers Inc. has entered a customized, non-recourse financing agreement with Universal Underwriters Acceptance Corp. (UUAC) to provide all Hometown Auto dealerships with sub-prime financing assistance.
As part of the agreement, UUAC will offer extensive sub-prime financing programs that can help Hometown dealers sell cars, trucks, vans and SUVs to consumers with poor credit ratings.
Under terms of the agreement with UUAC, Hometown dealers will be able to make credit decisions based on a customer's (car) payment-to-income ratio and whether a customer can establish minimal time on the job, residence and several other stipulations set out in UUAC's "Dealer Guide."
This means that in making the credit decision on deals that they intend to ask UUAC to accept, Hometown dealerships will not look at a person's debt-to-income ratio, as is usually the case in evaluating auto credit.
Because of the UUAC-established criteria on which the dealer makes its credit decision, and because of the fact that those criteria embrace many customers who would otherwise almost certainly be denied auto credit, Hometown dealerships can now offer their sub-prime customers higher-quality vehicles they may otherwise not have been able to finance.
Hometown dealers have also elected to provide UUAC-qualified customers with a standard six months/6,000-mile warranty.
"In the past, Hometown has had to turn away many potential customers because we were not equipped to handle certain demands of sub-prime financing," said Corey Shaker, president and chief executive officer for Hometown.
"With UUAC's advanced financing program, we will be able to assist thousands of new customers annually to purchase quality vehicles, with good profits for Hometown. In addition, the loans offered are non-recourse to Hometown. This means we will not be responsible for any loss resulting if a customer fails to make payments."
As part of the agreement, UUAC will also provide Hometown dealerships with leads generated from CreditLand.com, a Web site owned and operated by Creditland Lending Inc., a subsidiary of Creditland Inc. UUAC estimates that more than 7,000 leads a month are generated for the Northeast region alone through CreditLand.com.
The CreditLand.com site allows consumers to search, apply and be pre-qualified for an "auto loan." Once pre-qualified, those consumers electing to do so are put in touch with the cooperating UUAC dealership (all Hometown dealerships are in the program) closest to the consumer, and the dealership then selects a vehicle that matches the pre-qualification data and delivers it to the customer.
In virtually all such cases, UUAC will "accept" the contract if it is asked by the dealer to do so.
"Since Hometown Auto Retailers is one of the 100 largest auto dealership networks in the country, UUAC is happy to extend customized sub-prime loan services to Hometown's dealerships," said Michael Tuno, finance and insurance divisional administrator for Universal Underwriters Group. (UUAC is the consumer finance division of Universal).
By working together, we can help its dealerships sell more cars, and help thousands of people rehabilitate their credit by offering them the opportunity to purchase quality automobiles from a quality automotive group."