By John Flynn, Open Lending President & CEO
As the coronavirus pandemic lingers on, we all look forward to seeing our new normal. Many companies have had to change how they’ve done business, to innovate, and to make drastic changes to remain successful and thrive. The auto market is no different.
We’d seen consistent growth in auto sales and lending for a decade, and everyone was hoping for another strong year, but a report from CNBC projected auto sales will fall by as much as 15% in 2020. With a drastic shift like this, how do credit unions continue to book new loans? And what about our dealer partners? Some may not survive the downturn. Open Lending and our excellent line up of strategic partners can help your credit union make more loans now.
Consumers were already trending toward doing more research online, and even more so now, before buying a vehicle or taking out a loan for one. Ensure you and your partners are putting your best foot forward online. In an era of social distancing and zero contact, are tools such as virtual showroom walkthroughs or contactless test drives and deliveries readily available? Building these solutions will be core components to continue to serving consumers and borrowers.
Lenders can also ensure we’re doing our part. Are loan departments staffed for busy sales times? Is your technology up-to-date so you can say ‘yes’ in real time? Including evenings and weekends. If you can’t serve your partners in their time of need, they’ll find someone else who can. Open Lending can help you say ‘yes’ to more loans – in 7 seconds or less! Learn more.
Review your auto loan decisioning criteria. In today’s world, the crisis has hit the economy hard – forcing a recovery that may take years. Traditional methods of determining creditworthiness won’t fit this new model. Using alternative data will help you find not only more borrowers, but also better quality borrowers. Open Lending’s LP score can predict default with 99.2% accuracy. You can get a better picture of borrowers’ financial health both before and during the crisis. These members that need help can prove to be some of your best long-term customers, and when you price appropriately for risk, which we can help you with, you’ll earn more, and members will save more. Win-win.
As we all try to work our way through the crisis helping our members, remember tightening the belt may be a short-term approach, but now is the time to look at changing the way we do business, look to creative solutions for the challenges ahead, and re-invent auto lending. Not only will this help our members, it will help your institution come out stronger and built for long-term success.