In this presentation, we explore how vehicle choice can help predict probability of default, even after controlling for financial terms and borrower credit score. Our analysis suggests that vehicle information, including residual price forecasts, lifts the ability of traditional scores to classify borrowers from most likely to default to least likely. We will explore questions such as: Can vehicle information help assess the creditworthiness of borrowers? What vehicle types are associated with better credit performance? How economically significant is vehicle information?
Takeaways:- An understanding of how economics impact the performance of the auto finance industry under baseline forecasts and alternative scenarios
- Leave with a greater understanding about how variables, such as household income, credit scores and even vehicle choice trends impact your businesses
