lifecycle of automobile ownership 2 24 16 fico
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© 2016 Fair Isaac Corporation. Confidential. 1
© 2016 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.
FICO Auto & Motorized Mastermind Network MeetingFebruary 23–25, 2016 | Napa, California
Lifecycle of Automobile Ownership
Barrett TeagueVP, Lender Solutions, Black Book
© 2016 Fair Isaac Corporation. Confidential. 3
When you think value
• You think sales• You think loans• You may consider insurance• What if I named nearly 50 touch points
© 2016 Fair Isaac Corporation. Confidential. 4
Action in the Auction LaneMost often associated with true “Value”
© 2016 Fair Isaac Corporation. Confidential. 5
Seven Starting Points
© 2016 Fair Isaac Corporation. Confidential. 6
Disruptor
• While you hear the vehicle value cycle, where are opportunities for disruption?
• Black Book is more than just value• Think about the future of transportation• Think from the decision network, which
number shapes our future?
© 2016 Fair Isaac Corporation. Confidential. 7
Financial Usage
• Underwriting─ Loan Pricing─ Verification at booking─ Prediction of future portfolio
behavior• Portfolio Analysis
─ Setting reserve for loan losses─ Based on analytics
• Change receivable mixture• Choose to offload or increase
Lending• Residual Setting
─ Facilitating sales─ Lease End Preparation─ Off Lease, CPO, etc.
• Organic Growth─ Lenders mining their own
portfolio• Remarketing
─ Supportive captive client ready to purchase again
─ Repo
© 2016 Fair Isaac Corporation. Confidential. 8
• Floor planning─ Making inventory readily
available• Dealer financing
─ When an Owner wants to sell a dealership
• Audit • Compliance
• Collections─ Strategy can vary based on
positioning• Securitizations• Ratings agencies
─ Build value in a portfolio beyond historical performance
Financial UsageLending
© 2016 Fair Isaac Corporation. Confidential. 9
Manufacturing Shipping Marketing
Now let’s retreat to the beginning
© 2016 Fair Isaac Corporation. Confidential. 10
Origin
• Manufacturer─ Historical performance indicates
future ─ Brand loyalty is measured in
some ways through value
• Shipping─ Inventory shipped must be
insured─ Premium calculation
• Dimensions for rail• Weight to project fuel
consumption
• Marketing─ Setting consumer expectation
• Think of the ads touting strength of residual
─ Mailers to consumers generate desire
─ Equity calculations• “used car buy back” flyers
─ Internal marketing to existing clients• Predicting when a client will want
a new vehicle and offering tools to assist
© 2016 Fair Isaac Corporation. Confidential. 11
The Dealership as a Power User
• Purchase at Auction / Floor plan• Auction Buy Back• Evaluate trade in• Inventory management• LIFO calculations for taxes• Dealership sales• Acquisitions
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After the Sale
Government Insurance Legal
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The Back End
• Government─ Taxation ─ Ad valorem─ Benefit calculation
• Legal─ Litigation─ Bankruptcies─ Fraud detection
• Insurance─ Underwriting to the proper level─ Pricing─ Claims
• Theft• Damage
─ GAP settlements─ Rental Policies─ Global policies─ Residual Value Insurance
© 2016 Fair Isaac Corporation. Confidential. 14
There are endless opportunities to create, earn and build value across the lifecycle of a single vehicle.Where does your innovation fit?
© 2016 Fair Isaac Corporation. Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.
FICO Auto & Motorized Mastermind Network MeetingFebruary 23–25, 2016 | Napa, California
Thank YouBarrett [email protected]