Auto finance experts analyse rate-for-risk revolution

With the ban on discretionary commissions coming into force on 28 January 2021, closer inspection of the text from the FCA announcing the ban indicates that rate-for-risk models are worthy of further investigation. Whilst this isn’t a green light from the FCA, auto finance companies should be now looking at this model and considering its adoption. The term rate-for-risk details the process wherein a lender assigns a customer a rate based on their credit risk and affordability profile.

Auto finance experts analyse rate-for-risk revolution

Nov 19, 2020

With the ban on discretionary commissions coming into force on 28 January 2021, closer inspection of the text from the FCA announcing the ban indicates that rate-for-risk models are worthy of further investigation. Whilst this isn’t a green light from the FCA, auto finance companies should be now looking at this model and considering its adoption. The term rate-for-risk details the process wherein a lender assigns a customer a rate based on their credit risk and affordability profile.

Used car market faces 6.41 million transactions at end of 2020, forecasts Cox Automotive

Whilst used vehicle prices and consumer demand has eased during lockdown 2.0, they were already decreasing in October before any announcement of a second wave of national restrictions was made, says Cox Automotive in its mid-month review for November. Urging the industry to observe the figures in a wider context, Philip Nothard (pictured above), insight and strategy director at Cox Automotive, explained: “With the introduction of a second round of national restrictions at the start of November, many retailers were undoubtedly nervous about how this would impact business for the remainder of the year.

Used car market faces 6.41 million transactions at end of 2020, forecasts Cox Automotive

Nov 24, 2020

Whilst used vehicle prices and consumer demand has eased during lockdown 2.0, they were already decreasing in October before any announcement of a second wave of national restrictions was made, says Cox Automotive in its mid-month review for November. Urging the industry to observe the figures in a wider context, Philip Nothard (pictured above), insight and strategy director at Cox Automotive, explained: “With the introduction of a second round of national restrictions at the start of November, many retailers were undoubtedly nervous about how this would impact business for the remainder of the year.

Prime minister's 10-point plan: auto industry responds

Yesterday, the UK auto industry awoke to the sound of the prime minister announcing that the sale of new internal combustion engine (ICE) vehicles will have to stop with effect from 2030, some 10 years earlier than the initial deadline.

Prime minister's 10-point plan: auto industry responds

Nov 19, 2020

Yesterday, the UK auto industry awoke to the sound of the prime minister announcing that the sale of new internal combustion engine (ICE) vehicles will have to stop with effect from 2030, some 10 years earlier than the initial deadline.

Americas

Pandemic to have long-term impact on US subprime auto market, says new report from Davis & Gilbert

Sep 16, 2020

With the subprime auto loan performance expected to deteriorate, many respondents to the latest Credit Chronometer from Davis & Gilbert LLP predicted that the pandemic would have a long-term impact on the sector. The report – named Participants’ Expectations in a Time of Crisis – revealed that unemployment, a key indicator of loan performance, has reached historic levels as a result of the pandemic and led to widespread forbearances. However, respondents expected deal structures to hold and reacted with moderation to the uncertainty plaguing the market. Market participants of the study believed that the projected performance of a subprime auto securitization remained the most reliable indicator of its success. Although credit ratings had declined since 2019 as a success factor, indicating a reliance by participants on their own review of data.

Asia Pacific

Toyota Finance New Zealand partners with Ephesoft on digital transformation initiative

Jan 28, 2020

Toyota Financial Services New Zealand (TFNZ) has partnered with Ephesoft to drive its automotive loan application and settlement processing. TFNZ will use Ephesoft’s Transact software within its loan operations team to automate the classification and processing of key forms and documents. The Transact platform uses artificial intelligence, machine learning and cloud-based services to automate document processing and will integrate with the finance company’s existing loan origination system.