Near-Prime Not So Bad; F&I Can Help; Are Zoomers Rich?

Car dealership finance and insurance managers see all types of auto-loan seekers.

Vehicle buyers with super-prime status are a snap to finance. But successful F&I managers know how to get financing for people who are lower on the credit pole.

Our F&I coverage this year delved into that issue in a story headlined “Near Prime Not Nearly as Bad as Some Auto Lenders Think.”     

Lenders’ misperceptions of such people as poor credit risks can hurt their ability to obtain reasonably priced auto financing, according to Open Lending's 2024 Vehicle Accessibility Report.

The survey says traditional underwriting practices can alienate and exclude many creditworthy near- and non-prime consumers.

It seems like those folks are among the misunderstood people of the world.

“That’s a great way of putting it,” says Open Lending executive Kevin Filan.

Other 2024 WardsAuto stories on similar topics include:

How F&I Managers Can Help

It’s no surprise that many near- and non-prime consumers are at risk of being priced out of the automotive market. A solution? A bit of extra diligence by F&I managers.

That’s explored in a 2024 WardsAuto story headlined “Ask F&I Managers to Take the Wheel.”  

“Non- and near-prime customers are today’s prime customers,” says Justin Gasman, a senior F&I trainer at Ron Reahard and Associates and a former dealership F&I director.

He adds: “Today’s credit scoring – which I take issue with – makes them look worse than they are. It’s not them; it’s the economy.

“There’s a big difference between a guy who is temporarily down on his luck because of life’s circumstances and a professional deadbeat who has no business being in a car dealership F&I office.”

Are Zoomers Rich?

Another WardsAuto story from 2024 looked into how a growing number of people pay cash on the barrelhead to buy a vehicle.

CDK Global surveyed new-car buyers on how they finance their purchases. Including all age groups, 29% of respondents said they paid cash rather than opt for a loan with monthly payments.

“It surprised me it was that high,” said CDK analyst Dave Thomas.  

But here’s the kicker:

The youngest car buyers, Generation Z, led all other age groups in saying they paid cash for a car. Nearly 50% of polled Zoomers (the oldest in their mid-20s) said so.

Is the survey suggesting young car buyers possess more money than their elders? No. If anything, it suggests many of the polled Zoomers are getting some family financial aid from parents, grandparents or perhaps both.