Tackling Inflation and the Auto Industry Part 1: Protecting Your Loan Portfolio from Car Market Volatility

In today’s auto lending environment, a comprehensive and high-quality portfolio protection program is more important than ever — including partnering with a provider that will pay the full loan balance instead of actual cash value (ACV). Protecting Your Auto Loan Portfolio from Car Market Volatility Consumers Are Facing Financial Stress and Uncertainty Many Americans increasingly financially strapped, as well as uncertain what their financial future will bring — and borrowers aren't the only ones at risk. Future market volatility has the ability to impact a vehicle’s perceived value between now and when a member pays off their loan. Today’s larger loan balances and longer loan terms leave them at risk of being upside down, with a vehicle worth considerably less than what they still owe. As a result, this also increases risk for lenders in their loan portfolios as they are providing loans to their members for vehicles with a hyperinflated value. If the collateral sustains damage or loss when a borrower is uninsured or underinsured, the financial institution can also find itself “upside down,” with the claims amount they receive insufficient to cover its exposure. The Good News The solution? When you partner in a high-quality collateral protection program with State National, you can receive Waiver of Actual Cash Value (ACV) coverage — which means State National will pay the value of the entire loan amount remaining and not just a car’s value at the time of a claim. In “normal” times, Waiver of ACV coverage is a valuable tool for decreasing risk in a lender’s portfolio. In times like these, when lenders are already being double-squeezed by low net interest margins and increases in bad debt, it’s a vital part of a successful risk mitigation strategy. For more information on how this valuable solution can help you manage risk in your auto loan portfolio, contact one of our specialists today! To read the second article in this SNC Spotlight series, visit Part 2, Maintaining Your Competitive Edge.

The Difference Is in the Details: Timely Automated Insurance Verification for Borrowers “Why am I getting these notifications? I sent in my insurance information already — twice!” Depending on the company and system you’re using for insurance tracking, this kind of noise may be an all-too-familiar sound. It’s never a good feeling to hear that an upset borrower has called to complain that they’ve received an insurance notification — or even worse, had a policy placed — in error. That’s why it’s so important that the partner you choose for portfolio protection has done everything they can to ensure those calls don’t happen. Collateral protection has come a long way since State National pioneered it back in 1973. In those days, when notifications and insurance submission was all done by mail or phone, even the best-run programs had to cope with a certain level of borrower noise because of unavoidable delays. But, fast forward to today and cutting-edge proprietary advanced technology and tools are available to solve these problems — in many cases, before they ever happen. We’ll let you in on a secret, though — not every provider has them at the same level, although they may tell you they do. Because of State National’s exclusive technology solutions, and service that’s entirely focused on portfolio protection, all you’ll notice is the peaceful sound of silence — which is good for your borrowers, your staff, and your bottom line. Watch the short video below to see how State National can help you reduce friction and borrower noise in your collateral protection program.

Ceremony kicks off “Spring Into Wellness” event for employees

“State National certainly saves us time and money, because of the tracking they do on the insurance. That’s why we use them.”