Rising nonprime loan volume in vehicle sales has triggered new records in sales and profits for WFS Financial, whose CEO, Joy Schaefer, predicts a continuing uptrend this year, but at a slightly slower rate because of the slowdown in domestic-brand sales.
Based in Irvine, CA, WFS boosted its auto contracts 26% last year to $4.2 billion from $3.3 billion in 1999. Net income surged 42% to $74.7 million, or $2.53 a share.
Ms. Schaefer says, “Our record financial performance is driven by three factors: growth in auto contract originations at wider interest margins; improvement in credit quality; and lower operating cost levels.”
Nearly 6,000 franchised dealers are on WFS's portfolio, including five of the 10 largest dealer groups.
“Nowadays, with the shakeout in the credit field at the end of last year, dealers and dealer groups are calling us instead of the other way around,” says Ms. Schaefer. “2000 was a defining moment for WFS and as our revenues advance at about 18% to 20% this year and our losses stay at the 2% level, I feel 2001 will be a breakaway year.”