Indirect Auto Pricing Monitoring

Credit Price MonitoringDescription

Preiss&Associates’ Direct/Indirect Auto Price Monitoring™ Service reviews pricing decisions of direct/indirect auto loan portfolios of financial institutions and captive finance companies on both a dealership and loan basis. On a dealership basis, Preiss&Associates monitors the frequency and magnitude of the difference between the buy rate and contract rate charged protected class applicants versus non-protected class applicants to identify dealers that may have frequency or magnitude issues. On a loan basis, Direct/Indirect Auto Rate Monitoring™ uses regression analysis to monitor for possible problem loans regardless of the dealership.

Uses

  • Tests for systematic differential treatment in dealer credit pricing on direct or indirect auto loans using regulator procedures.
  • Examines for differential treatment with respect to the interest rate spread (the difference between the buy rate and contract rate) charged protected classes versus non-protected classes regardless of the dealership.
  • Assures consistency in the direct/indirect pricing decision across their customer base.

Benefits

  • Identifies applications in an institution’s direct/indirect auto loan portfolio that may have received differential treatment with respect to the pricing decision
  • Reviews all loans, on a dealership basis if applicable, to determine if a protected basis group is receiving “overages” more frequently than a non-protected basis group
  • Reviews all loans, on a dealership basis if applicable, to determine if the average “overage” a protected basis group is receiving is statistically different from the average “overage” a non-protected basis group is receiving (a magnitude test)
  • Monitors applications, over time and on a dealership basis if applicable, for those that seem to regularly appear on these frequency and magnitude exception lists.

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