Auto Industry Grapples with New Challenges in Vehicle Affordability
A CONFLUENCE OF NEW CHALLENGES IN THE AUTOMOTIVE INDUSTRY MEANS CAR SHOPPERS ARE STILL FACING VEHICLE AFFORDABILITY ISSUES – it’s just for a new set of reasons today. Vehicle affordability has been a burning issue highlighted in an article back in May.
While high interest rates, inflation and vehicle supplies have kept vehicle prices high, today’s car shoppers are grappling with new challenges, such as the reinstatement of student loan payments and the potential effects the ongoing automotive worker strike may have on prices. Let’s take a closer look at these two new challenges:
Student Loans: Student loans account for a 1.5 trillion dollar share of nearly $17 trillion of total outstanding debt. Given the recent student loan ruling, this looming debt will squeeze many drivers’ wallets further. This could add an additional $150 or $250 worth of student loan payments which will make a significant difference in a car shopper’s budget, or an existing driver’s ability to keep making car payments.
Union Strike: The unresolved auto workers strike could strain the supply of popular domestic vehicles and quickly drive up car and truck prices. A month-long strike could cause shortages of some vehicle models, according to Rob Handfield, Bank of America University professor of supply chain management at North Carolina State University.
Equifax is helping address these affordability challenges for consumers by working with lenders to provide additional insights during the vehicle loan process so lenders can present consumers with the most favorable terms. This additional information, such as telecommunications, pay TV, and utilities payment history, is a feature of Insight Score for Auto that expands beyond what traditional credit data can provide.
“Insight Score for Auto is extremely effective because it uses differentiated data to help qualify individuals for loans or terms they may not have previously been candidates for under the legacy scoring attributes,” said Lena Bourgeois, Senior Vice President and General Manager of Automotive Services at Equifax U.S. Information Solutions. “This is also beneficial for auto lenders, who are continuously looking to identify additional credit applicants utilizing advanced data technology tools.”
Insight Score for Auto employs Equifax NeuroDecision® Technology, a patented modeling technique powered by artificial intelligence, offering comprehensive insights intended to help lenders reduce risk in their portfolios by helping to understand how credit scoring decisions are made. This technology enables lenders to remain compliant and make wise choices when evaluating credit risk.
Equifax is focused on opening opportunities for people to access affordable, mainstream financial services in each of the 24 countries it does business. Through The Equifax Cloud™, unique data, fraud reduction tools, and powerful modeling techniques, Equifax develops global solutions that bring greater access to financial opportunities to more people in more places.
For more information on Insight Score for Auto, visit Equifax.com.