Why it might be time to accelerate your auto loan marketing

Auto loans performed well during the pandemic, just as we expected they would. Credit inquiries are an early predictor of the market, and because we track auto loan inquiries from all three credit bureaus, we could foresee that despite a few pandemic-related disruptions, auto lending would remain healthy through the duration.

In the chart below, the tri-bureau credit data clearly show the slowdown in inquiries in the early months of the pandemic. However, by mid-May of 2020, inquiry data rebounded as lenders began offering zero-percent financing and other attractive loan options. This eventually led to the new-car inventory shortages we are still experiencing today. In March of 2021, we started seeing consumers adjust their purchase expectations and embrace the used car market. 

New car manufacturing issues will eventually resolve, inventory of new and used vehicles will grow, and pent-up consumer demand should drive a healthy auto financing market for years to come. According to a recent report by Grandview Research, the U.S. automotive finance market is expected to grow at an impressive compound annual growth rate of seven percent from 2021 to 2028. 

Despite this rosy prediction, some banks and independent lenders are backing away from auto lending, leaving even more opportunities for those who are more bullish on the market.

If your company is interested in continuing to drive auto-loan portfolio growth, the following campaign strategies might be worth investigating immediately.

Prescreen auto refinance campaign

By combining credit data from three bureaus with your qualifying criteria, you can identify consumers who are eligible to refinance their auto loans at a lower rate. Most lenders mine for opportunities by regularly monitoring their list of existing customers from across all their product areas. Once they find their targets, they reach out with firm offers of credit.

Auto equity campaigns

Using tri-bureau credit data, you can discover consumers who just paid off an auto loan and offer them the opportunity to borrow against the value of their car. As an alternative to credit, you can use geographical targeting with propensity models for a broader-reaching invitation to apply campaign.

Pay-for-performance originations

Large data and marketing partners have the resources to offer you risk-free, fully managed campaigns with no upfront costs. You pay an agreed-upon amount for each funded loan the campaign generates.

Prescreen credit triggers for originations

This always-on program uses credit inquiry data from all three credit bureaus to identify consumers who are actively searching for an auto loan. Each consumer who triggers is quickly targeted with an omni-channel campaign that includes a firm offer of credit and supporting social and display ads that keep your brand top of mind.

There are many sources you can rely on as you track the state of the U.S. auto finance market. But when it comes to the best way to find auto borrowers and grow your loan portfolio, we want to be your premier resource. Please send us a note so we can start helping you weigh the pros and cons of available campaign strategies right away.