FORT WORTH, Texas -

When Digital Recognition Network hosted its second annual DRN Lender Roundtable early last month, 20 top executives from some of the largest auto finance companies shared three similar challenges their facing nowadays.

According to DRN’s recap of its event, these auto finance leaders cited intensifying competition and more charge-offs resulting in the need for additional personnel to handle collections and skip-tracing chores. Jeremiah Wheeler, vice president financial services for DRN, shared insights from the roundtable in a blog post the company pushed online this week.

“All of the lenders are being challenged to be more competitive. They are buying deeper and lending more with longer loan terms,” Wheeler said. “And as result, everyone is experiencing more charge-offs.

“In the last 24 months, outstanding auto balances have grown along with portfolio sizes,” he continued. “But too often, that means that delinquencies and charge-offs also go up. The lenders are forced to staff up, hire more skip-tracers and more collectors.

“The result? The sheer cost of risk increasing,” Wheeler went on to say.

DRN’s event also included a trip to see some of the best professional rodeo athletes in the world. But the roundtable also brought together companies that lock horns in dealership F&I offices nationwide to book originations up and down the credit spectrum.

“Sure there’s always a little tension; these are competitors,” Wheeler said when asked if there was any competitive tension in the room.

“A few didn’t speak out and we definitely had a few sidebars around what they are doing and are planning to do to get a leg up on their competition,” he continued. “It just goes back to what we said earlier. The competition is fierce with these guys.

“They all had a great time socializing but ultimately, they are all driven to succeed and are looking to DRN to help make that happen,” Wheeler added.

Along with discussing the industry as a whole, Wheeler and the rest of DRN team wanted to know how the company is helping auto financing outlets respond to these challenges.

“We are offering lenders a way to address these challenges from default to recovery using DRN’s Vehicle Location Intelligence. We even discussed a future where the lenders could add DRN’s Vehicle Location Intelligence to other rating factors at origination to write more, better loans,” Wheeler said.

“But right now, lenders are using our data insights to decrease charge-offs and find more cars earlier,” he continued. “They are locating customers with our location reports that provide new addresses and phone numbers for making contact.”

So bottom line: What did the finance companies have to say about their results with DRN?

“These lenders told us that DRN is having a measurable impact on their operations,” Wheeler said. “Lenders enabling DRN’s Vehicle Location Intelligence on all repossession accounts are seeing a double-digit reduction in charge-offs, and they are increasing their recovery rates related to (license plate recognition) by 20 percent and sometimes more.

“And they tell us that this is information they simply can’t get anywhere else. DRN’s Vehicle Location Intelligence is a game changer for them,” he went on to say.