Financing my first car was a bittersweet feeling. I was thrilled at the thought of purchasing a new vehicle, yet I was dreading haggling the price with the dealer. As a millennial, I feared the rising prices for new cars, and knew that I needed to find a way to make the vehicle more affordable. That said, I decided to look at used cars. Clearly, I’m not the only car shopper going through this experience. Many consumers are exploring new options to keep their monthly payments down, whether it’s extending the length of their loan, or turning to leases. Sometimes it’s both. According to Experian Automotive’s Q2 2015 State of the Automotive Finance Market report, the average loan amount for a new vehicle reached $28,524, while the average loan amount for a used vehicle hit $18,671, a second quarter high and an all-time high, respectively. Subsequently, the increasing loan amounts also caused the average monthly payment for new ($483) and used ($361) vehicles to increase. Interestingly, the $122 difference in average monthly payment was also a second quarter high, furthering the need to make car payments affordable. As such, consumers continued to take out leases. During the second quarter, leasing accounted for 26.9 percent of all new vehicle transactions, reaching an all-time high. While leasing continues to be a popular option among car shoppers to keep monthly payments down, we’re beginning to see these consumers take it a step further. Sure 36-month term leases are still the most popular, however the percentage of leases extending past the 36 months into the 37- to 48-month range has increased by 18 percent. Furthermore, the average lease payment dropped $13 from a year ago, reaching $394. Findings from the report also showed that consumers continued to lengthen their loan terms, especially for used vehicles. The percentage of used vehicles financed for 73- to 84-months increased by 14.8 percent from Q2 2014 to reach 16.1 percent – the highest percentage of record. New vehicles financed for the same term length climbed 19.7 percent from the previous year to reach 28.8 percent. If the trend continues, we can only expect vehicles to become more expensive and harder to keep within budget. That said there are ways to keep monthly payments within reason. Just as I did, consumers will need to explore the different options available and work with the financing tool that best meets their needs. If they can do that, it will just be the sweet feeling of purchasing a car.

As Big Data becomes the norm in the credit industry and others, the seemingly non-stop efforts to accumulate more and more data leads me to ask the question - when is Big Data too much data?  The answer doesn’t lie in the quantity of data itself, but rather in the application of it – Big Data is too much data when you can’t use it to make better decisions. So what do I mean by a better decision? From any number of perspectives, the answer to that question will vary. From the viewpoint of a marketer, maybe that decision is about whether new data will result in better response rates through improved segmentation. From a lender perspective, that decision might be about whether a borrower will repay a loan or the right interest rate to charge the borrower. That is one the points of the hype around Big Data – it is helping companies and individuals in all sorts of situations make better decisions – but regardless of the application, it appears that the science of Big Data must not just be based on an assumption that more data will always lead to better decisions, but that more data can lead to better decisions – if it is also the “right data”. Then how does one know when another new data source is helping? It’s not obvious that additional data won’t help make a better decision. It takes an expert to understand not only the data employed, but ultimately the use of the data in the decision-making process. It takes expertise that is not found just anywhere. At Experian, one of our core capabilities is based on the ability to distinguish between data that is predictive and can help our clients make better decisions, and that which is noise and is not helpful to our clients.  Our scores and models, whether they be used for prospecting new customers, measuring risk in offering new credit, or determining how to best collect on an outstanding receivable, are all designed to optimize the decision making process. Learn more about our big data capabilities

According to the latest State of the Automotive Finance Market report, consumers are continuing to extend loan terms as a way to keep payments low.

A recent Experian study on data insights found that 83% of chief information officers see data as a valuable asset that is not being fully exploited within their organization, resulting in the need for more organizations to appoint a dedicated chief data officer (CDO).

While auto delinquencies declined slightly year over year (3.01% for accounts 30 days past due or greater in Q2 2015 versus 3.03% a year earlier), it is interesting to note the variance in delinquency by lender channel.

Fraud management is an ongoing issue for businesses, especially when it comes to identifying likely fraudulent customers and delivering excellent customer service

Solving the regulatory compliance issue:  In terms of best practice, it all really starts with the data, creating sound risk management strategies, and...

Increased volume of fraud attempts during back to school shopping season. Is your fraud strategy prepared to handle the increased volume?

According to the latest Experian-Oliver Wyman Market Intelligence Report, mortgage originations for Q2 2015 increased 56% over Q2 2014 — $547 billion versus $350 billion.

Protect consumers on summer vacation fraud. Evidence shows fraudster activity increases during the summer and identity theft becomes easier. 

According to a recent Experian analysis, millennials (ages 19–34) are now the largest segment of the U.S. population and are also the least credit savvy group.

Surveillance and fraud staging are the seemingly benign and often-transparent account activities that fraudsters undertake after an account has been compromised but before that compromise has been detected or money is moved.

According to VantageScore® Solutions' annual validation study, VantageScore 3.0 scores 36 million incremental consumers considered unscoreable by conventional credit scoring models.

Understanding shelf companies and shell companies In our world of business challenges with revenues level or trending down and business loans tougher than ever to get, “shelf” and “shell” companies continue to be an easy option for business opportunities. Shelf companies are defined as corporations formed in a low-tax, low-regulation state in order to be sold off for its excellent credit rating. Click on the internet and you will see a plethora of vendors selling companies in a turn-key business packages. Historically off-the-shelf structures were used to streamline a start-up, where an entrepreneur instantly owns a company that has been in business for several years without debt or liability. However, selling them as a way to get around credit guidelines is new, making them unethical and possibly illegal. Creating companies that impersonate a stable, well established companies in order to deceive creditors or suppliers in another way that criminals are using shelf companies for fraudulent use. Shell companies are characterized as fictitious entities created for the sole purpose of committing fraud. They often provide a convenient method for money laundering because they are easy and inexpensive to form and operate. These companies typically do not have a physical presence, although some may set up a storefront. According to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, shell companies may even purchase corporate office “service packages” or “executive meeting suites” in order to appear to have established a more significant local presence. These packages often include a state business license, a local street address, an office that is staffed during business hours, a conference room for initial meetings, a local telephone listing with a receptionist and 24-hour personalized voice mail. In one recent bust out fraud scenario, a shell company operated out of an office building and signed up for service with a voice over Internet protocol (VoIP) provider. While the VoIP provider typically conducts on-site visits to all new accounts, this step was skipped because the account was acquired through a channel partner. During months one and two, the account maintained normal usage patterns and invoices were paid promptly. In month three, the account’s international toll activity spiked, causing the provider to question the unusual account activity. The customer responded with a seemingly legitimate business explanation of activity and offered additional documentation. However, the following month the account contact and business disappeared, leaving the VoIP provider with a substantial five figure loss. A follow-up visit to the business showed a vacant office suite. While it’s unrealistic to think all shelf and shell companies can be identified, there are some tools that can help you verify businesses, identify repeat offenders, and minimize fraud losses. In the example mention above, post-loss account review through Experian’s BizID identified an obvious address discrepancy – 12 businesses all listed at the same address, suggesting that the perpetrator set up numerous businesses and victimized multiple organizations.  It is possible to avoid being the next victim and refine and revisit your fraud best practices today. Learn more about Experian BizID and how to protect your business.

According to the latest Experian-Oliver Wyman Market Intelligence Report, mortgage originations increased 25% year over year in Q1 2015 to $316 billion.