What’s been going on this year in the auto lending industry? In this blog post, we’ll take a look at the top five things that have been happening in 2020 in the auto lending industry, and give you tips to help your financial institution thrive in 2021.
1. Global Consumer Confidence Index Declines Sharply
According to The Conference Board, “In 2020 Q2, The Global Consumer Confidence Index fell sharply from a near historic high of 106 in Q1 to 92, indicating there were more pessimistic consumers than optimistic ones globally for the first time since 2016 (a reading below 100 is considered negative). The 14-point drop is the largest quarterly decline since the index began in 2005 Q1 and is double the largest drop in the index during the global financial crisis in 2008-09.”
2. Longer Loan Terms Could Be a Troubling Sign for Lenders
Financial institutions typically offer auto loan terms that range anywhere from 24 to 72 months. However, one trend that the industry has seen in recent years has been financial institutions issuing loans over much longer periods. In fact, 84 months is not an uncommon term length for borrowers.
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