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Top Insights from #ExperianVision 2018 Day 2

Published: May 22, 2018 by Kerry Rivera

The second full day of Experian Vision 2018 kicked off with an inspirational message from keynote speakers Capt. Mark Kelly and Former Congresswomen Gabby Giffords, rolled into a series of diverse breakout sessions, and concluded with Super Bowl-winning quarterback Aaron Rodgers sharing tales of sports, leadership and winning.

Need a recap of some of the headlines from the day? Here you go …

Retail Apocalypse? Not so fast alarmists. Yes, there are media headlines around mergers, closings and consumers adopting new ways to shop, but let me give you three reasons as to why the retail sky is not falling.

  1. There were more store openings last year than closings, and that trend is expected to continue this year with an estimated 5,500 openings by December.
  2. There continues to be a positive sales trajectory.
  3. E-commerce sales are increasing. Big department stores have seen pains, but if brands are focused on connection, relevance and convenience, there is hope. Consumers continue to spend.

Subprime auto bubble? Nope. Malinda Zabritski, Sr. Director of Experian Automotive Sales, says the media likes to fixate on the subprime, but subprime financing has been on the decline, reaching record lows. Deep subprime is at .65%. Additionally, delinquency rates have also tapered. The real message? Consumers are relying on auto lenders for financing, largely due to consumer preferences to lease. The market is healthy, and while it has slowed slightly, the market is still at 7% year-over-year growth.

Consumer-permissioned data is not just a value-add for thin-file consumers. Take for instance the inclusion of demand deposit accounts (DDAs). David Shellenberger, Sr. Director of Scoring and Predictive Analytics for FICO, says people who have had long relationships with their checking accounts tend to be more stable and generally sport higher credit scores. Consumers with thick, mature files can also benefit with DDA data. Consumer-permissioned data is not just about turning a “no” to a “yes.” It can also take a consumer from near-prime to prime, or from prime to super-prime.

Would you want to make a credit decision with less information or more? This was the question Paul DeSaulniers, Experian Sr. Director of Product, posed to the audience as he kicked off the session on alternative data. With an estimated 100 million U.S. consumers falling below “thick-file” credit status, there is a definite need to learn more about these individuals. By leveraging alternative credit data – like short-term lending product use, rental data, public records and consumer-permissioned data – a more holistic view of these consumers is available.

A few more facts:

  • While alternative finance users tend to be more subprime, 20% are prime or better.
  • A recent data pull revealed 20% of approved credit card users also had alternative finance data on them as well.
  • About 2/3 of households headed by young adults are rentals.

Imagine a world where the mortgage journey takes only seven to 10 days. With data and technology, we are closer than you think. Future products are underway that could master the underwriting phase in just one day, leaving the remaining days dedicated for signing disclosures, documents and wiring funds. Processes need to be firmed up, but a vision has been set. The average 30- to 45-day mortgage journey could soon be a distant memory.

97% of online banking applications that are started are abandoned. Why? Filling out lengthy forms, especially on a mobile device, is not fun. New technology, such as Experian’s Instant Form Fill, is allowing consumers to provide a name, zip and last four numbers of their social security number for an instant form fill of the rest of the application. Additionally, voice assistants are expected to increasingly facilitate research on purchases big and small. A recent study revealed nearly half of consumers perceive voice assistants to be useful.

Businesses have more fraud losses than ever before. Not surprising. What is scary? An estimated 54% of businesses said they are not confident in their ability to detect fraud. Another session reported that approximately 20% of credit charge-offs are synthetic IDs, a growing pain point for all businesses. Consumers, on the other hand, say they “want visible signs of security” and “no friction.” Tough to balance, but those are today’s expectations.

More Vision 2018 insights can be accessed on #ExperianVision twitter feed. Vision 2019 will be in San Antonio, Texas next May 5-8.

Related Posts

The automotive industry is constantly changing. Shifting consumer demands and preferences, as well as dynamic economic factors, make the need for data-driven insights more important than ever. As we head into the National Automobile Dealers Association (NADA) Show this week, we wanted to explore some of the trends in the used vehicle market in our Special Report: State of the Automotive Finance Market Report. Packed with valuable insights and the latest trends, we’ll take a deep dive into the multi-faceted used vehicle market and better understand how consumers are financing used vehicles. 9+ model years grow Although late-model vehicles tend to represent much of the used vehicle finance market, we were surprised by the gradual growth of 9+ model year (MY) vehicles. In 2019, 9+MY vehicles accounted for 26.6% of the used vehicle sales. Since then, we’ve seen year-over-year growth, culminating with 9+MY vehicles making up a little more than 30% of used vehicle sales in 2024. Perhaps more interesting though, is who is financing these vehicles. Five years ago, prime and super prime borrowers represented 42.5% of 9+MY vehicles, however, in 2024, those consumers accounted for nearly 54% of 9+MY originations. Among the more popular 9+MY segments, CUVs and SUVs comprised 36.9% of sales in 2024, up from 35.2% in 2023, while cars went from 44.3% to 42.9% year-over-year and pickup trucks decreased from 15.9% to 15.6%. 2024 highlights by used vehicle age group To get a better sense of the overall used market, the segments were broken down into three age groups—9+MY, 4-8MY, and current +3MY—and to no surprise, the finance attributes vary widely. While we’ve seen the return of new vehicle inventory drive used vehicle values lower, it could be a sign that consumers are continuing to seek out affordable options that fit their lifestyle. In fact, the average loan amount for a 9+MY vehicle was $19,376 in 2024, compared to $24,198 for a vehicle between 4-8 years old and $32,381 for +3MY vehicle. Plus, more than 55% of 9+MY vehicles have monthly payments under $400. That’s not an insignificant number for people shopping with the monthly payment in mind. In 2024, the average monthly payment for a used vehicle that falls under current+3MY was $608. Meanwhile, 4-8MY vehicles came in at an average monthly payment of $498, and 9+MY vehicles had a $431 monthly payment. Taking a deeper dive into average loan amounts based on specific vehicle types—as of 2024, current +3MY cars came in at $28,721, followed by CUVs/SUVs ($31,589) and pickup trucks ($40,618). As for 4-8MY vehicles, cars came in with a loan amount of $22,013, CUVs/SUVs were at $23,133, and pickup trucks at $31,114. Used 9+MY cars had a loan amount of $19,506, CUVs/SUVs came in at $17,350, and pickup trucks at $22,369. With interest rates remaining top of mind for most consumers as we’ve seen them increase in recent years, understanding the growth from 2019-2024 can give a holistic picture of how the market has shifted over time. For instance, the average interest rate for a used current+3MY vehicle was 8.0% in 2019 and grew to 10.2% in 2024, the average rate for a 4-8MY vehicle went from 10.3% to 12.9%, and the average rate for a 9+MY vehicle increased from 11.4% to 13.8% in the same time frame. Looking ahead to the used vehicle market It’s important for automotive professionals to understand and leverage the data of the used market as it can provide valuable insights into trending consumer behavior and pricing patterns. While we don’t exactly know where the market will stand in a few years—adapting strategies based on historical data and anticipating shifts can help professionals better prepare for both challenges and opportunities in the future. As used vehicles remain a staple piece of the automotive industry, making informed decisions and optimizing inventory management will ensure agility as the market continues to shift. For more information, visit us at the Experian booth (#627) during the NADA Show in New Orleans from January 23-26.

Published: January 21, 2025 by Melinda Zabritski

To authenticate identities and combat fraud within the Gen Z population, financial organizations need to implement comprehensive strategies.

Published: August 16, 2024 by Alex Lvoff

Over the past few years, we’ve seen in-market shoppers lean into the used vehicle space; however, with new vehicle inventory continuing to rebound, we’re starting to see a reversal of fortune. Data in the first quarter of 2024 shows how the resurgence of new vehicle inventory is reshaping the automotive landscape.

Published: June 4, 2024 by Melinda Zabritski

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