Open Loan Research Reveals Opportunity for Auto Lenders
AUSTIN, Texas–(BUSINESS WIRE)–Open loan Corporation (NASDAQ: LPRO) (“Open Lending” or “the Company”), an industry pioneer in loan activation and analytics solutions for financial institutions, conducted a survey of vehicle affordability and consumer perception in the United States. Americans are returning to in-person work environments, survey results shed light on the crisis in vehicle affordability, as well as reveal how these barriers are affecting Americans’ quality of life and influencing their beliefs about financial products which they can access. The results also validate the possibility for lenders to prove that the perception of consumers in all credit segments is that auto loans are not an accessible option for them.
Non-car owners across a diverse set of age brackets, income brackets and credit segments indicated that buying a car seems out of reach in the current financial climate, with many citing uncertainty and doubts around the loan process. But respondents also made it clear that the desire to own a car has not waned because it would make a difference in their personal and professional lives. In their own words, respondents noted how a personal vehicle would help them generate extra income, meet family needs, and ease the stress of coordinating appointments and childcare alongside their work schedules. work.
Open Lending collected responses from 1,347 full-time and part-time employees in the United States, including 597 car owners and 750 non-car owners. Of all respondents, 54% qualify as non-preferred or near-preferred borrowers and 25% qualify as primary borrowers. Key findings from the survey include:
- Cars remain unaffordable for many, with some disqualifying themselves from the loan process before they even try. Almost half (48%) of non-car owners said they simply couldn’t afford a car, with 8% saying they didn’t think they qualified for a car. car loan.
- Car inaccessibility is a barrier to career growth: 55% of non-car owners said they had to turn down lucrative job opportunities and promotions. Meanwhile, 62% said a car would improve their job performance moderately or significantly, and 64% said not having a car impacted their overall earning potential.
- The simplicity and transparency of the lending process represents a major opportunity for financial institutions. A quarter of non-car owners find the car buying process unclear or confusing. A good experience makes a big difference for this group: Among all non-car owners, 83% said they would return to a lender for other purposes if they had a positive car loan experience.
“At Open Lending, we know that owning a car has the power to change people’s lives, but for many, buying a car doesn’t seem like an option. This new study further validates the proposition of longstanding value that Open Lending provides to the industry and highlights why it is even more valuable today given current consumer perceptions,” said CEO Keith Jezek. “Our Lenders Protection™ program helps financial institutions to reach out to borrowers who think the lending process is not for them and offer loan rates that fit their life.”
With Open Lending Opportunity Calculator, financial institutions can get personalized results on their potential to increase close and non-preferential lending with the Lenders Protection™ assured decision-making platform. Since its launch in 2003, Open Lending’s Lenders Protection™ program has been used by more than 400 financial institutions to originate and insure more than $16 billion in auto loans.
Open Lending will publish its full report on vehicle affordability and announce the results via webinar on December 13. Sign up to receive the report and attend the webinar here.
About Open Loan
Open Lending (NASDAQ: LPRO) provides loan analytics, risk-based pricing, risk modeling and default insurance to auto lenders across the United States. For more than 20 years, we’ve empowered financial institutions to build profitable auto loan portfolios by saying “yes” to more auto loans. For more information, please visit www.openlending.com.