Another One Bites The Dust

The following notice was posted on Triad Financial’s website last week

IMPORTANT DEALER NOTICE

Effective May 23, Triad Financial Corporation will cease all lending operations for its Indirect Dealer Channel. Conditions in the financial markets have been extraordinarily unstable, and have hindered our ability to adequately and cost-effectively fund future business through traditional methods, including asset-backed securitizations.

Triad has served the dealer community for more than 18 years, and values the relationships we have enjoyed with you and the customers we share. We will no longer accept new applications as of 5 p.m. today.

Triad will, however, honor existing approvals and fund eligible contracts forwarded to us through June 23. Triad will continue to operate and fund loans in its Direct-Lending Channel, RoadLoans.

On behalf of our fine team of lending professionals in our Credit & Funding Center in North Richland Hills, Texas and our highly dedicated Sales team across the United States, we would like to thank you for your business. We value the support you have shown us over the past 18 years and wish you future success.

It seems like the handwriting on the wall is becoming clearer, and not only is it getting tougher for consumers to get a loan. It’s getting tougher for the lenders to securitize their portfolios to get money to fund new deals. As the marketplace tightens up on all sides, everyone is going to take a long, hard look at the business they are in.

Lenders are going to take a long hard look at the business they get from their dealers, and how that business performs over time. Dealers that provide a good mix of business which performs at an expected level will continue to enjoy the relationships they have with lenders they deal with. Marginal deals, and dealers that provide them, will become tougher to find a home, as lenders consider whether that dealership should remain a part of their “team”.

Now, more than ever, it is critical to know how your lenders look at your dealership. What is the value your dealership has to a lender? Are you a winner or a whiner; do you work your customer and then the lender, or do you try and break a lender’s back before you even try to close a customer.

When lenders find it harder to secure funding, it all flows downhill. Until the markets rebound, and investors see the opportunity in these deeper lender portfolios, it’s going to harder on everyone involved. The days of “EZ Credit” are long gone, and customers need to realize that credit id a privilege, not an entitlement. Educate your customer on the process, what’s involved and how it works. Help them understand that it’s a different game now. You may be able to get them approved for a loan; it’s up to them to determine whether or not they can live with the terms and conditions of the approval!