Life happens. The pandemic is in full swing, and your member’s car has died or been in an accident – but many states have ordered people to shelter in place and closed nonessential businesses. Is this going to completely shut down the auto lending business?
Unfortunately, it can be unclear what is expected under these orders. Auto repair shops, gas stations and auto parts stores are considered essential businesses and can remain open, but auto dealer showrooms are not in most cases. Even when dealership showrooms are closed, options are available.
Open Lending is open for business. 97% of our clients hit their yield targets during the
Great Recession, and we can help your financial institution through the corona fallout.
The Fed has quickly dropped rates to zero, which means credit unions and community banks have more room to refinance car loan borrowers into better deals. Open Lending works with some great refinance partners, and we recommend that you check them out.
Refinancings are an opportunity to keep your auto lending going, bring in new members and customers, and save borrowers money.
Another consideration during these trying economic times is that it might be wise to sell loans for higher credit score members with slim to no margin. During times of economic uncertainty, these members tend to be less nimble to address a job loss, while others will scramble to work odd jobs and pay the bills. It’s something we experienced during the housing crisis in 2008-09.
As the economic concern of your consumer base grows, including car salespeople, retailers and others, perhaps your institution can help their employees in some way to shoulder the short-term financial burden.
As a lender in this time of personal, financial and economic crisis here are some ways you can continue to serve your consumers while protecting your employees and business:
Consider other programs you can offer consumers to help them in this time of need, such as loan payment deferrals, which Open Lending is now offering for our client institutions
Work with your dealer-partners to see what they are doing to continue auto sales in this crisis
Stress test your loan portfolio. Open Lending can help you do this, so contact us today.
Enable or upgrade digital loan documentation and applications, including image capture and optical character recognition to auto-fill forms from a borrower’s driver’s license
Employ work from home measures, including secure remote connections, to keep employees serving consumers
Prepare to handle appointments to work with borrowers; you may need to go to them
This current pandemic is clearly a challenge in maintaining auto sales and lending, but it doesn’t have to stop it. Be proactive and work to support your partners and consumers, and you’ll be working to lessen the overall impact to your business.