Wednesday, January 13, 2021

New Auto Lending Becoming Even More Competitive

  TCT RISK SOLUTIONS NEWSWIRE

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New Auto Lending Becoming Even More Competitive

Aman Johal writes in a December 2020 article in creditunions.com/blogs that: “Nationwide quarantines and stay-at-home orders pushed consumers to adopt a more conservative attitude toward debt. Consequently, the overall demand for auto loans, particularly for new vehicles, decreased. Low interest rates helped to partially offset this decline in demand, particularly in used auto lending, which has fueled auto growth in 2020.”

Credit unions should by now have systems in place that allow them to expand their market reach and make loans profitably to borrowers other than those rated “A+ and A”. Lending only to “low risk” borrowers means pricing to a level such that profitability is questionable.

TCT’s Risk Based Loan Pricing tool assures credit unions can reach deeper into the loan pool and originate lower credit-grade loans that are profitable.

 

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