Why You Should Consider Hiring a Collection Agency for Auto Loan Delinquencies

Dec 20, 2022

It’s no secret that the auto industry has been on the rise in recent years. With low interest rates and increased availability of financing, more and more people have been able to purchase cars. However, a new report from TransUnion shows that this increased demand for vehicles is also leading to an increase in auto loan delinquencies . Data from TransUnion shows that today, both the Gen Z and Millennial generations have auto loan delinquency rates that are higher than pre pandemic levels. So what does this mean for auto finance companies?

The Rise in Auto Loan Delinquencies

The primary reason for this trend is the combination of inflation and the forthcoming recession. As prices continue to rise, young people are finding it increasingly difficult to make their loan payments on time. In addition, the impending recession is likely to lead to further job losses and income reductions, making it even harder for young people to keep up with their payments. As a result, auto finance companies are likely to see an uptick in defaults and repossessions in the coming months. This trend is cause for concern not only for the industry but also for the economy as a whole.

Advantages Of Employing A Collection Agency

Cutting-edge Technology

As the world progresses, so does the technology that we use on a daily basis. This also applies to the debt collection industry. Collection agencies have access to skip-tracing tools, collection AI, and other resources that can help locate debtors and collect more money. For instance, FCS has a unique OmniXp contact platform and EngageRight machine learning engine, which makes customer interactions more organized and user-friendly. Together these powerful tools optimize recovery rates and provide consumers the freedom to connect and pay through the medium they prefer.

Legal Compliance

When you work with a collections agency, you can rest assured that the job will be done in accordance with federals and state laws. One of the major benefits of using a collections agency like FCS is their knowledge of legal compliance. Keeping up with all the necessary local and federal laws is essential in order to conduct debt collection activities. This isn’t an area you’ll want to skimp on, as compliance can have serious repercussions if ignored.

Better Negotiation Skills

One of the biggest advantages of working with a collection agency is that they have experienced negotiators on staff. These professionals know how to contact debtors and negotiate payment plans that are acceptable to both parties. As a result, auto finance companies are more likely to receive payments and build good faith with their customers.

Higher Recovery Rates

One of the primary advantages of employing a collection agency is that it can help to increase recovery rates. Collection agencies specialize in collecting debts, and they have a variety of tools and strategies that they can use to collect payments. We at First Credit Services have invested heavily in technologies like the OmniXp contact platform and EngageRight machine learning engine to provide better recovery rates. Additionally, collection agencies typically have a higher success rate than in-house collections departments, as they are more experienced and have more resources.

Are you confused about which collection company to count on? Choose First Credit Services! We are a leading debt collection agency that offers both Early stage collection and Late stage collections for auto finance businesses. We utilize two unique ways of customer engagement: Omni Xp – which provides consumers the freedom to choose how they interact and EngageRight – a machine learning engine that creates customized connection strategies. With over 25 years of experience, you can rest assured trust us to handle your credit collection services and accounts receivable.
Contact us today to learn more about debt collection services for your auto finance business.

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