Welcome to the Daily 5 report for Friday, Dec. 12.
It has the makings of a Gary Cooper Western — a standoff against some upstarts new in town intent on changing the way things have been done for years. Or maybe a Schwarzenegger plot as Arnold battles the latest technological wizardry shaking up an industry.
How else to make a debate about auto loan terms and decisioning seem sexy?
As John Huetter reports, some in the auto lending space argue a shift to loan terms powered by high-tech AI and away from the lowest tech — a static rate sheet — can be harmful to dealerships. That's because, some say, a salesperson using a rate sheet would have certainty into how much the car buyer would pay on the loan.
But computer-powered underwriting done later in the buying process removes that certainty and means the dealer's estimate could be incorrect. A study found lender payments end up more than $30 more than dealers are quoting. That could potentially kill a deal or at a minimum negatively impact a customer's mood.
However, some of the biggest dealership groups in the U.S. say the move away from rate sheets is not a big deal. Dealerships say while they can't completely read the mind of a lender's technology, through experience, study and repetition they have a pretty good idea how a customer will do.
Besides, NADA argues, customers know that payment information given early in the car-buying process is just preliminary and a fuller credit history is needed to receive a specific quote.
One thing for certain — this will not be the last debate on whether AI is a force for good in automotive.
That's it for today. Have a great rest of your day. If you want to view this story on your browser, click here.
— Dan Shine, news editor
No comments:
Post a Comment