Nov. 2, 2025 | Bonus Episode: Kunis Auto’s Scot Hensel on Tricolor collapse ripple effects
About this episode
Scott Hensel, finance director at Kunis Auto Group, discusses the implications of Tricolor Holdings' collapse on the subprime lending market with Jon Hutter. Despite concerns, Hensel reports that lenders are not tightening their criteria for subprime deals. The conversation also touches on fraud issues, consumer trends, and the evolving landscape of financing products, including the growing popularity of bundled services. Hensel emphasizes the importance of training and technology in mitigating risks associated with fraud and maintaining customer trust.
Scot Hensel, finance director at Kunes Auto Group, talks about the collapse of major used-vehicle dealership group and buy-here-pay-here lender Tricolor Holdings and what it means for other lenders and dealers.
Hensel tells Automotive News Staff Reporter John Huetter that he hasn’t seen any subprime lenders tightening up on the deals they’ll accept from Kunes.
Auto Finance Summit
"They spoke at the recent Auto Finance Summit in Las Vegas about the collapse of major used vehicle dealership group and buy‑here‑pay‑later lender Tricolor Holdings, specifically what it means for other lenders and dealers."
It’s a big meeting where people who help people buy cars talk about new rules and how the market is changing.
The Auto Finance Summit is an industry conference where automotive finance professionals discuss trends, regulations, and market developments.
dealership group
"They spoke at the recent Auto Finance Summit in Las Vegas about the collapse of major used vehicle dealership group and buy‑here‑pay‑later lender Tricolor Holdings, specifically what it means for other lenders and dealers."
It’s a company that runs several car sales locations under one name, sharing staff and marketing.
A dealership group is a collection of car dealerships owned or operated under a single corporate entity, often sharing branding and resources.
buy-here-pay-later
"They spoke at the recent Auto Finance Summit in Las Vegas about the collapse of major used vehicle dealership group and buy‑here‑pay‑later lender Tricolor Holdings, specifically what it means for other lenders and dealers."
It’s a way to buy a car without a bank loan. The dealer or a special lender lets you pay over time, and you own the car while you’re paying it off.
Buy‑here‑pay‑later (BHP‑L) is a financing option where the dealer or lender provides credit directly to the buyer, allowing them to pay in installments while keeping ownership of the vehicle until fully paid.
subprime
"One-fifth of Kunis' finance originations are subprime. Hensel tells Jon that he has not seen any subprime lenders tightening up on the deals they'll accept from his group."
Subprime loans are for people who don’t have great credit. They usually cost more because the lender sees them as riskier.
Subprime refers to loans given to borrowers with lower credit scores, typically involving higher interest rates and stricter terms.
Chevy Malibu
"[343.0s] why are they driving so far to buy a Chevy Malibu? [350.5s] I mean, it's just a great color. It's the best Chevy Malibu ever."
The Chevy Malibu is a common family car that many people use for everyday driving. It's known for being reliable and easy to maintain.
The Chevy Malibu is a mid-size sedan produced by Chevrolet, known for its affordability and practicality.
prepaid maintenance
"I mean, we're hearing prepaid maintenance seems to be doing better these days. I don't know if that's anything you guys have noticed."
Think of it like buying a maintenance plan for your car in advance. You pay once, and the dealer takes care of routine services like oil changes for a set number of years or miles.
Prepaid maintenance is a service contract where the customer pays upfront for a set of scheduled maintenance services, such as oil changes and inspections, over a specified period. It’s often sold by finance and insurance (F&I) departments as a way to lock in future service revenue.
vehicle service contract gap
"what the penetration is, vehicle service contract gap, tire wheel, things like that."
It’s the space between how many people could buy a service plan and how many actually do. Finding that gap lets dealers offer the right plans to more customers.
The vehicle service contract gap refers to the difference between the potential market demand for service contracts and the actual sales volume. Identifying this gap helps dealerships target under-served customers and improve F&I product penetration.
tire wheel
"what the penetration is, vehicle service contract gap, tire wheel, things like that."
A tire wheel is just the tire plus the metal part it sits on. Dealers sometimes bundle them together when selling maintenance or replacement services.
In automotive terminology, a tire wheel refers to the combination of the tire (rubber outer part) and the wheel rim that attaches it to the vehicle. This term is often used when discussing maintenance or replacement packages.
gap insurance
"...service contract, gap insurance, those are important. I think we can both agree on that."
Gap insurance pays the gap between your car’s price and its worth if it gets wrecked or stolen, so you don’t owe money on a car that’s gone.
Gap insurance covers the difference between what you owe on a loan or lease and the actual cash value of your vehicle if it’s totaled or stolen.
lease
"...if it's a lease, different products, you're not really going to sell the service contract."
Leasing a car means you pay each month to use it, and at the end you can return it or buy it. It’s like renting a car for several years.
A lease is a long-term rental agreement where the lessee pays monthly fees to use a vehicle for a set period, after which they return it or buy it.
tire and wheel
"...selling like a package to them? Like, okay, this is tire and wheel, key fob and whatever..."
Tires are the rubber circles on your car that touch the road, and wheels are the metal rings they sit on. They’re what keep you moving.
Tires are the rubber components that touch the road, while wheels (or rims) are the metal rings that hold the tires. Together they form the vehicle’s contact patch.
key fob
"...key fob and whatever, you know, a couple. Okay. Yeah."
A key fob is the little button box that lets you lock or unlock your car from a distance. It’s like a remote for your vehicle.
A key fob is a small electronic device that allows remote locking, unlocking, and sometimes starting of a vehicle.
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