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of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum
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Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The value of a good decision can generate $150 or more in customer net present value, while the cost of a bad decision can cost you $1,000 or more. For example, acquiring a new and profitable customer by making good prospecting and approval and pricing decisions and decisioning strategies may generate $150 or much more in customer net present value and help you increase net interest margin and other key metrics. While the cost of a bad decision (such as approving a fraudulent applicant or inappropriately extending credit that ultimately results in a charge-off) can cost you $1,000 or more. Why is risk management decisioning important? This issue is critical because average-sized financial institutions or telecom carriers make as many as eight million customer decisions each year (more than 20,000 per day!). To add to that, very large financial institutions make as many as 50 billion customer decisions annually. By optimizing decisions, even a small 10-to-15 percent improvement in the quality of these customer life cycle decisions can generate substantial business benefit. Experian recommends that clients examine the types of decisioning strategies they leverage across the customer life cycle, from prospecting and acquisition, to customer management and collections. By examining each type of decision, you can identify those opportunities for improvement that will deliver the greatest return on investment by leveraging credit risk attributes, credit risk modeling, predictive analytics and decision-management software.
By: Kennis Wong It's true that intent is difficult to prove. It's also true that financial situations change. That's why financial institutions have not, yet, successfully fought off first-party fraud. However, there are some tell-tale signs of intent when you look at the consumer's behavior as a whole, particularly across all his/her financial relationships. For example, in a classic bust out case, you would see that the consumer, with pristine credit history, applies for more and more credit cards while maintaining a relatively low balance and utilization across all issuers. If you graph the number of credit cards and number of credit applications over time, you would see two hockey-stick lines. When the accounts go bad, they do so at almost the same time. This pattern is not always apparent at the time of origination, that's why it's important to monitor frequently for account review and fraud database alerts. On the other hand, consumers with financial difficulties have different patterns. They might have more credit lines over time, but you would see that some credit lines may go delinquent while others don't. You might also see that consumers cure some lines after delinquencies…you can see their struggle of trying to pay. Of course the intent "pattern" is not always clear. When dealing with fraudsters in fraud account management, even with the help of the fraud database, fraud trends and fraud alert, change their behaviors and use new techniques.
By: Tracy Bremmer There has been a lot of hype these days about people strategically defaulting on their mortgage loans. In other words, a consumer is underwater on their house and so he/she makes a strategic decision to walk away from it. In these instances, the consumer is current on all of their non-mortgage accounts, but because the value of their home is less than what they owe, they make the decision to default on their mortgage loan. Experian and Oliver Wyman teamed up to really dig into this population and determine these issues: • Does this population really exist? • If so, what are the characteristics of this population, such as assessing credit risk or bankruptcy scores? • How should loan modification strategies be differentiated based on this population? This blog will be one of a three-part series that addresses these questions. Let’s begin with the first question. 1. Does this population really exist? The quick answer is yes – this population does indeed exist. In fact, in 2008 strategic defaulters represented 18 percent of all mortgage defaults, up 500 percent from 2004. When we conducted our study we found there were varying populations that also existed when it came to mortgage defaults. In fact, we classified mortgage defaulters into five categories: strategic defaulter, cash flow manager, distressed defaulter, no non-real estate trades, and pay-downs. We defined these populations as follows: • Strategic defaulter – Borrowers who are delinquent on their mortgages, even when they can afford the payment, because their loan balance exceeds the value of their home, • Cash flow manager – Borrowers facing delinquency issues with their mortgage because of temporary distress, but continue to make payments on all credit obligations, • Distressed defaulter – Borrowers facing potential affordability issues that go delinquent on their mortgage along with other credit obligations, • No non-real estate trades – Borrowers who are delinquent on their mortgage, however they do not have any other non-mortgage trades to evaluate if they have strategically defaulted or are in distress, • Pay-downs – Borrowers who pay down their mortgage loan. In my next blog, I will address the characteristic differences in behavior between these populations. Specifically, I will evaluate what characteristics make strategic defaulters stand out from the rest and what is unique about the cash flow managers. Source: Experian-Oliver Wyman Market Intelligence Reports; Understanding Strategic Default in Mortgage topical study / webinar. August 2009.
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With the National Automobile Dealers Association (NADA) Show set to kickoff later this week, it seemed fitting to explore how the shifting dynamics of the used vehicle market might impact dealers and buyers over the coming year. Shedding light on some of the registration and finance trends, as well as purchasing behaviors, can help dealers and manufacturers stay ahead of the curve. And just like that, the Special Report: Automotive Consumer Trends Report was born. As I was sifting through the data, one of the trends that stood out to me was the neck-and-neck race between Millennials and Gen X for supremacy in the used vehicle market. Five years ago, in 2019, Millennials were responsible for 33.3% of used retail registrations, followed by Gen X (29.5%) and Baby Boomers (26.8%). Since then, Baby Boomers have gradually fallen off, and Gen X continues to close the already minuscule gap. Through October 2024, Millennials accounted for 31.6%, while Gen X accounted for 30.4%. But trends can turn on a dime if the last year offers any indication. Over the last rolling 12 months (October 2023-October 2024), Gen X (31.4%) accounted for the majority of used vehicle registrations compared to Millennials (30.9%). Of course, the data is still close, and what 2025 holds is anyone’s guess, but understanding even the smallest changes in market share and consumer purchasing behaviors can help dealers and manufacturers adapt and navigate the road ahead. Although there are similarities between Millennials and Gen X, there are drastic differences, including motivations and preferences. Dealers and manufacturers should engage them on a generational level. What are they buying? Some of the data might not come as a surprise but it’s a good reminder that consumers are in different phases of life, meaning priorities change. Over the last rolling 12 months, Millennials over-indexed on used vans, accounting for more than one-third of registrations. Meanwhile, Gen X over-indexed on used trucks, making up nearly one-third of registrations, and Gen Z over-indexed on cars (accounting for 17.1% of used car registrations compared to 14.6% of overall used vehicle registrations). This isn’t surprising. Many Millennials have young families and may need extra space and functionality, while Gen Xers might prefer the versatility of the pickup truck—the ability to use it for work and personal use. On the other hand, Gen Zers are still early in their careers and gravitate towards the affordability and efficiency of smaller cars. Interestingly, although used electric vehicles only make up a small portion of used retail registrations (less than 1%), Millennials made up nearly 40% over the last rolling 12 months, followed by Gen X (32.2%) and Baby Boomers (15.8%). The market at a bird’s eye view Pulling back a bit on the used vehicle landscape, over the last rolling 12 months, CUVs/SUVs (38.9%) and cars (36.6%) accounted for the majority of used retail registrations. And nearly nine-in-ten used registrations were non-luxury vehicles. What’s more, ICE vehicles made up 88.5% of used retail registrations over the same period, while alternative-fuel vehicles (not including BEVs) made up 10.7% and electric vehicles made up 0.8%. At the finance level, we’re seeing the market shift ever so slightly. Since the beginning of the pandemic, one of the constant narratives in the industry has been the rising cost of owning a vehicle, both new and used. And while the average loan amount for a used non-luxury vehicle has gone up over the past five years, we’re seeing a gradual decline since 2022. In 2019, the average loan amount was $22,636 and spiked $29,983 in 2022. In 2024, the average loan amount reached $28,895. Much of the decline in average loan amounts can be attributed to the resurgence of new vehicle inventory, which has resulted in lower used values. With new leasing climbing over the past several quarters, we may see more late-model used inventory hit the market in the next few years, which will most certainly impact used financing. The used market moving forward Relying on historical data and trends can help dealers and manufacturers prepare and navigate the road ahead. Used vehicles will always fit the need for shoppers looking for their next vehicle; understanding some market trends will help ensure dealers and manufacturers can be at the forefront of helping those shoppers. For more information on the Special Report: Automotive Consumer Trends Report, visit Experian booth #627 at the NADA Show in New Orleans, January 23-26.
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.
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typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.