Auto loans are growing at their fastest rate since 2006, according to the Federal Reserve Bank of New York. Loan originations have topped the $800-billion mark for the first time in nearly five years, and delinquencies are at their lowest level since 2008. You can feel the momentum growing as consumers gain confidence, the economy recovers and the jobs market strengthens.
And yet you’re concerned about loan production. You’re not sure why some recent bids were lost or where the dealers took those deals. Lost business needs to be addressed — before the market momentum passes you by.
The end of the “Golden Age”?
In spite of a warming economy, competitive pressure is mounting. Lenders who exited the space during the recession are returning. In fact, the leader of the fourth-largest auto lender in the nation, Capital One’s CEO Richard Fairbank, has said that the “Golden Age” of once-in-a-lifetime growth is ending. With rising used-car prices and increasing competition in the automotive lending industry, Fairbank believes the new reality will be a focus on efficiency, managing costs and exploiting technology.
But can technology help you track lost business, understand which of your competitors are capturing the bids you lost and discover what the terms were to win those loans? The straight answer is yes.
Finding data on lost business
Lewis Carroll, author of “Alice in Wonderland,” wrote: “If you don’t know where you are going, any road will take you there.” Unfortunately, if you don’t know where your lost business is going, you could be rolling down quite a rocky road. Assessing lost bids requires:
- Learning which competitors are winning the deals you worked on
- Knowing the terms your competitors offered to gain a loan
- Determining if lost deals would have been a good fit for your portfolio
- Finding out where dealers are sending applications
Armed with this market intelligence, lenders can determine if lost business is going to more competitive offers, or if deals that were voluntarily passed on are now performing well for the competition. That information can allow lenders to assess if strategic moves need to be implemented, such as adjusting future offers and terms in order to win more quality loans.
Such insight into lost business is like having a road map to greater profitability. Now you know where you’re going. Interested in learning more about Equifax solutions for Automotive? Please visit: http://www.equifax.com/automotive/en_us