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How Arivo is Embracing Refinancing to Drive Growth in 2025
In a significant strategic move, Arivo Acceptance is focusing on enhancing its refinancing products as a pathway to double its origination volume in 2025. This comes at a critical time when navigating the dynamics of interest rates and credit standards becomes increasingly complex.
Understanding the Shift towards Refinancing
Refinancing has long been a lifeline for borrowers facing higher interest rates. Arivo, a subprime lender, recognizes that while they tightened credit standards, maintaining a strong refinance program can mitigate potential losses and drive higher volume. The company’s attempt to ramp up refinancing was initially stalled but is now back on track as the market adjusts.
The Benefits of Refinancing for Borrowers
For borrowers, refinancing presents an opportunity to restructure their loan terms, often leading to lower monthly payments. As Arivo's Chief Executive Landon Starr points out, embracing refinancing not only aids in achieving financial stability for consumers but also positions Arivo strategically within a competitive marketplace. This insight comes as the company reported that its refinance losses were approximately 30% lower than their indirect portfolio, further solidifying the value of this offering.
Future Prospects: Growing Origination Volumes
With the goal of doubling origination volumes, Arivo’s focus on its refinancing products could set a precedent in the industry. As varying economic situations drive consumers to seek better financing options, dealerships and lenders need to stay ahead of these trends. Understanding and promoting refinancing options will be crucial for success moving forward.
Action Steps for Dealerships
Dealership principals, GMs, and fixed ops directors should take note of Arivo's strategy and explore how they can integrate similar practices into their own operations. Offering transparent refinancing options not only fosters customer loyalty but can also enhance dealership revenues through increased vehicle turnover rates.
To grasp the shifting landscape, dealers should invest in automotive training that emphasizes refinancing knowledge, ensuring that your sales team is prepared to educate clients and streamline their refinancing experiences. Online resources and automotive classes can help in this pursuit.
As Arivo leads by example in refining its approach to refinancing, dealerships across the nation should consider their role in this evolving framework and take proactive steps to adapt. Expanding knowledge on refinancing could prove to be a game changer as 2025 unfolds.
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