By Julie Nielsen, Open Lending VP of Channel Partnerships
The economy was off to a great start at the beginning of the year, and auto lending has long been the bread and butter of credit unions. While auto lending did experience a dip earlier in the year as we felt the full effects of the coronavirus, credit unions have proven their resiliency in the area. Some credit unions are already returning to pre-coronavirus auto lending volumes.
We're really encouraged to see how quickly everyone has jumped back in with both feet, both in the refinance and purchase channels. Our priorities in the current economic environment are to support our lenders that are out in the market and making loans to consumers in need. Open Lending is proud to support so many doing so much for American consumers during this time. Learn more about how Open Lending can help your credit union build a more profitable auto loan portfolio!
Open Lending provides alternative credit scoring and default insurance for auto loans that helps credit unions feel confident in reaching deeper into nonprime and thin credit file borrowers. Your credit union will be your member’s hero! At the same time, we consult on pricing that results in the yield your credit union wants and needs.
We have certainly adjusted some underwriting factors and recommend credit unions be smart about that, too. We want to ensure credit unions are making loans that are appropriate for each borrower and adjusting debt-to-income and payment-to-income levels that make sense for the consumer, while also keeping the spigot open wide, so that as many applications can proceed to closing as possible. While auto loan defaults have remained low, some of that could be due to government assistance programs in response to the coronavirus, as many remain out of work or with reduced hours, particularly the travel and entertainment sectors.
It’s also critical for credit unions to be responsive to the consumers they serve. Credit unions can do this in house, but it may be more efficient to outsource technology to experts, so the credit union can increase its membership and loan volumes faster. Open Lending can approve a loan in less than 7 seconds! Contact us today to learn more.
People are looking to get out of their homes, drive their cars and go shopping and eat in restaurants. Mass transit or ride share options in the era of coronavirus are not as popular as they once were. Where we used to look at ride share options as a great benefit for a lot of reasons, now there is an element of health and safety that dampens our enthusiasm. Tourism and work commutes are way down and unlikely to return anytime soon. More consumers are looking at purchasing vehicles due to safety concerns.
Contactless car sales got a boost this year amid the coronavirus pandemic, as dealerships and lenders worked to continue serving car buyers. Dealerships’ eCommerce capabilities got ramped up to speed. Credit unions worked on eSignatures and digital funding, but consumers remained skeptical around contactless delivery and purchase opportunities.
Purchase finance numbers through our program went up dramatically as states and dealerships began reopening, so there appears to be pent up demand and that need to literally ‘kick the tires.’
As we move beyond the coronavirus pandemic and into recovery, credit unions can take this opportunity to work with tech partners to help penetrate new markets and offer products that better serve their members and their bottom line.