MARBLEHEAD, Mass. — FinCo Management, a provider of deep
subprime dealer financing, is expanding its Financing Alternatives and
Servicing Today program into 31 states, covering nearly 75 percent of the U.S. population.

The company said the program should be operating in those 31
states by mid-November.

By partnering with FinCo, dealers can offer deep subprime
loans and leases without having to fund and operate their own in-house lending
department or suffer deep discounts from subprime lenders. 

FinCo explained that it provides the capital, underwriting
and expertise dealers need to originate consumer contracts, which are assigned
to FinCo for servicing.

In a true partnership arrangement, FinCo president Toby
Reiley said all payments and expenses flow to the dealer's account. Warranty,
GPS, VSI and servicing costs are passed through at FinCo's cost.

Reiley said the total costs are far below what a dealer
would pay to run their own in-house financing operation so all profits and
losses flow to the dealer's portfolio.

"With our ‘financing alternatives', dealers earn a full deep
subprime profit without the overhead, capital or experience required to run a buy-here
pay-here department, and dealers don't have to suffer deep discounts or cash
recourse" Reiley said.

"We fund loans and leases on medium to high mileage vehicles
for customers with rough credit, no credit, cash incomes or no social security
number.  Salvage-titled vehicles are also
eligible. Nobody else provides all of
these services," he continued.

In addition to cash advances of up to 70 percent of the
consumer's amount financed, FinCo funds the cost of an extensive warranty, the
GPS and VSI. 

Reiley said FinCo also funds a 15 percent dealer reserve,
which is used to cover losses and makes FinCo's No-Cash Recourse program
possible.

Dealers can start off with a 50-percent cash advance (plus
the warranty, GPS, VSI and reserve) and earn their way to larger advances as
their portfolios grow and perform. Advance caps also increase from the
vehicle's wholesale value to NADA Used Car Guide Clean Trade.

After outlining the program, Reiley asked, "FinCo is a full
partner in keeping the customer paying, as FinCo only gets paid when the
customer is paying. Can your existing lender say that?"

To reinforce the company's program, Reiley shared an example
of a recent 70 percent advance deal closed by Jamie Roney, owner of J.R.'s Auto
Sales of Union City, Tenn. The deal included:

—2001 Chevy Tahoe with 136,000 miles and $2,500 cash down
plus a trade

—Dealer Cost ACV was $5,250 plus 80-percent mark-up

—FinCo funded 95 percent of the consumer's $9,001 amount
financed

—Weekly payments of $81.07 for 36 months

—Total Advance was 140 percent of NADA UGC Clean Trade and
163 percent of Black Book Average

—Immediate profit at closing $2,375 and $3,893 total profit
over time.

—No cash recourse

Reiley said this dealership earned its 70 percent advance
status in 2011 and today has a $1 million portfolio of more than 200 active
accounts and more than $275,000 of deferred profits to offset any losses.

Roney described the FinCo partnership as his "secret weapon."

Roney said, "They (FinCo) bring the money, the operations
and expertise so I can sell and lease more cars, and make more money. I don't
have to sell off my portfolio anymore to fund new inventory because I am making
a cash profit up front on every deal today. And I get all of the back-end
profit after their fee. It's a whole lot better than running it myself.

"FinCo really gets my business" Roney continued. "Together,
we just crushed it during tax season. We all know that repos are higher for tax
season sales, but the No-Cash Recourse makes it all work out really well."

"They've been great at managing the repo process for me. I
take all of my cars back after the Right-to-Redeem period ends," Roney said. "Having
a warranty that survives the repo is huge for me, as is the No-Cash Recourse.
Do you know how much it means to me that they don't call up and say that I owe
them a check for $4,000 on a car they repossessed 40 days ago?  Heck, I can have the vehicle back, fixed,
prepped, and resold or leased with FinCo financing in 30 days.  No-Cash Recourse is a godsend for my cash
flow planning.

"At J.R.'s, we started writing the FinCo leases in
September, and I think it will be more than half of my business in 3 months," Roney
said. 

Reiley is bit more conservative on the prospects of deep
subprime leasing.

"I think it will take a few years to spread nationally, but
leasing will account for half of the deep subprime and BHPH business in the
next three years" he said. 

Scott Laramie, FinCo's lead sales engineer, added, "For the
dealer wanting to take control of their deep subprime potential, FinCo delivers
an easy to learn, no upfront cost, and immediate alternative to everything else
in the market."

Laramie, who has 15 years of F&I and sales management
experience in both BHPH and franchised stores, also touched on compliance.

"We have two jobs: To keep you compliant and to make you
more money by expanding your market into deep subprime without the overhead,
capital and hassle. All FinCo products are already compliant with the new
California BHPH regulations," Laramie said.

FinCo Management uses contractors such as Auto Portfolio
Services, Carleton Calculations, Monetrics Decision Engine and Imetrik GPS
units.

Dealers interested in partnering with FinCo and independent
sales reps wishing to sell FinCo's program can get a first-hand look at the
company's offerings during the NABD East Coast Conference in Atlanta starting on
Sunday.

Details also are available at www.FinCoManagement.com.