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CARMEL, Ind. — During the second quarter, Automotive Finance Corp.'s loan
transactions climbed 16 percent year-over-year, leaving its total floor plan portfolio
at nearly $900 million.

And more importantly in the view of KAR Auction Services
chief executive officer Jim Hallett, that portfolio is more than 99 percent
current. Hallett explained how AFC is achieving these performances in what he acknowledged
is "what we consider to be a soft market."

Hallett told investment analysts during a conference call
this week that AFC's results are triggered by a couple of factors.

"It's due to our continued investment in technology both in
our core operating systems as well as some of our enhancements that we've made,
especially in the area of mobile applications," Hallett stated.

The KAR boss elaborated more about the other reason.

"We've often asked ourselves about the 104 loan production
offices that we have across North America and whether we need all of those
offices or whether we should be centralizing them. I think we've gotten our
answer," Hallett explained.

"We feel that the loan production offices really
differentiate us from our competition," he continued. "We think it puts us
closer to our customers. It enables us to provide a higher level of service to
our customers as we can have a high-touch business. We have 450 sets of boots
on the ground in these markets. We see our customers on a weekly basis.

"Maybe most importantly, I think it mitigates risk," he went
on to say. "If there are concerns with any of our customers, usually we're
first to hear about it because we're closest to the customer. Again, that's a
big differentiator for us."



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As a result, AFC enjoyed an 11-percent jump in revenue
during the second quarter as it moved up to $46.8 million from $42.0 million.
Furthermore, the company's Q2 gross profit moved 13 percent higher
year-over-year, climbing to $36.4 million from $32.3 million.