A quarter of non-car owners find the car buying process unclear or confusing, and 83% said they would return to a lender for other purposes if they had had a positive car loan experience.
AUSTIN, TX, November 15, 2022–(BUSINESS WIRE)–Open Lending Corporation (NASDAQ: LPRO) (“Open Lending” or “the Company”), an industry pioneer in lending and analytics solutions for financial institutions, has conducted a survey of vehicle accessibility and consumer perceptions in In the US As car prices soar and more Americans return to personal work environments, the survey results shed light on the crisis in vehicle affordability and how these barriers are affecting Americans’ quality of life and affecting their beliefs about what financial products, that they can access. The results also validate lenders’ ability to refute consumers’ perceptions across credit segments that auto loans are not an accessible option for them.
Non-car owners across a range of ages, income brackets and credit segments reported that buying a car feels out of reach in today’s financial climate, with many citing uncertainties and doubts surrounding the lending process. However, respondents also made it clear that the desire to own a car has not diminished, as this would make a difference in both private and professional life. In their own words, respondents indicated how a private vehicle would help them generate extra income, meet family needs and reduce the stress of coordinating appointments and childcare alongside their work hours.
Open Lending collected responses from 1,347 full- and part-time employees in the US, including 597 car owners and 750 non-car owners. Of all respondents, 54% qualify as sub-prime or near-prime borrowers and 25% as prime borrowers. Key findings from the survey include:
Cars remain unaffordable for many, and some disqualify themselves from lending before they even try. Almost half (48%) of non-car owners said they simply couldn’t afford a car, with 8% saying they didn’t think they would qualify for a car loan.
Car inaccessibility is a barrier to career growth: 55% of non-car owners reported turning down lucrative job offers and promotions. Meanwhile, 62% said having a car would improve their job performance either moderately or significantly, and 64% said not having a car impacted their overall earning potential.
Simplicity and transparency in the lending process represent a great opportunity for financial institutions. A quarter of non-car owners find the car buying process unclear or confusing. A good experience makes a big difference for this group: Of all non-car owners, 83% said they would return to a lender for other purposes if they had a positive car loan experience.
“At Open Lending, we know that owning a car has the power to transform people’s lives – but for many, buying a car doesn’t seem like an option. This new study validates the longstanding value proposition that open lending offers the industry and sheds light on why it’s even more valuable today given current consumer perceptions,” said CEO Keith Jezek. “Our Lenders Protection™ program helps financial institutions, those borrowers Reach out to those who believe the lending process is not for them and offer lending rates that work for their lives.”
With Open Lending’s Opportunity Calculator, financial institutions can get tailored results on their potential to increase near and non-prime lending with the Lenders Protection™ policyholder decision platform. Since its inception in 2003, Open Lending’s Lenders Protection™ program has been used by more than 400 financial institutions to originate and insure more than $16 billion in auto loans.
Open Lending will release its full vehicle accessibility report and announce the results in a webinar on December 13th. Register here to receive the report and attend the webinar.
About open lending
Open Lending (NASDAQ: LPRO) provides credit analysis, risk-based pricing, risk modeling and default insurance for auto lenders in the United States. For over 20 years, we’ve been helping financial institutions build profitable auto loan portfolios by saying “yes” to more auto loans. Visit www.openlending.com for more information.
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Alison Smith for Open Lending
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