Open Lending’s 84-month near and non-prime auto loans allow credit unions to meet rising auto prices
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Increased PTI (Payment to Income) ratio for indirect lending fuels auto loan growth and increases returns in an uncertain market
AUSTIN, Texas–(BUSINESS WIRE)–Open Lending Corporation (NASDAQ: LPRO) (“Open Lending” or “the Company”), an industry pioneer in lending and risk analysis solutions for financial institutions, today announced that it will offer them Customers the option to offer 84-month terms for new and used vehicles up to four years old with fewer than 60,000 miles. Compared to the previous maximum term, this means an increase of nine months. Additionally, Open Lending now offers its customers the ability to offer a higher PTI (Payment to Income) ratio for indirect lending, increasing full approvals and higher funding ratios due to fewer counter offers. Both offerings will help financial institutions increase lending volume, minimize risk and increase return on investment.
“Inflation affects everything we buy, including the cost of owning a car,” said John Flynn, chairman and CEO of Open Lending. “More than a third of applications requested terms greater than 72 months in 2021, so we are now offering the ability to provide higher loan amounts, longer loan terms and a higher PTI ratio for indirect loans. Our motivation and mission is to help our customers empower more of their close and non-premium members to achieve their vehicle ownership dreams during this uncertain time, while also helping our customers to unlock new revenue opportunities.”
According to that Dealertrack Credit Availability Index, the All-Loans Index has been down for three straight months and it has become increasingly difficult to get auto loans since it hit a record in April 2022. However, credit unions are still doing exceptionally well. Experian’sState of the automotive financing marketThe report showed that credit unions produced 25.8% of lenders’ loans and leases in the three months ended June 30, up from 18.3% a year ago and 22.1% in the first quarter of this year.
Open Lending client and CapEd Credit Union CEO Jeremy Sankwich’s experience is a testament to how credit unions are still growing by leveraging the Lenders Protection™ program. “Partnering with Open Lending allows us to offer more vehicle loan opportunities to members who are Near and Non-Prime members or Emerging Prime members while leveraging the efficiencies of Lenders Protection’s instant decision-making,” says the VP of Consumer Lending, “amidst a volatile economic climate, we are growing credit, increasing returns and helping a greater variety of members access credit while mitigating credit risk with Open Lending’s default insurance.”
Lenders Protection™ was introduced to the credit union market in 2003. Since then, financial institutions have used the Lenders Protection™ consolidated analytics and underwriting solution to originate and insure more than $16 billion in auto loans. Over 400 financial institutions have used the easy-to-use program to effectively originate near- and non-prime auto loans, drive loan growth and increase loan portfolio returns. To learn more about Open Lending and its Lenders Protection™ program or to schedule a demo, click here here.
About open lending
Open Lending (NASDAQ: LPRO) provides credit analysis, risk-based pricing, risk modeling and default insurance for auto lenders across the United States. For over 20 years, they have empowered financial institutions to build profitable auto loan portfolios by saying “yes” to more auto loans. For more information, please visit www.openlending.com.
Alison Smith for Open Lending
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Source: Open Lending Corporation