How to Harness Next-Level Auto Loan Pricing Intelligence with the Nomis-J.D. Power Partnership
Price Optimization, Auto Finance | Feb 11, 2022
Pricing is a delicate art, especially in the auto lending market. Today’s limited inventory and increased volatility have emphasized getting pricing right for lenders everywhere. It is this dilemma that our partnership with J.D. Power helps to solve by leveraging the most accurate pricing intelligence and analytics available on the market.
As John Huetter at Automotive News noted in a recent write-up on the partnership:
J.D. Power will allow lenders using its PIN Navigator tool to feed retail transaction data into Nomis' Price Optimizer platform, Nomis announced in November. PIN Navigator collects information on what Nomis said was more than 70 variables related to franchise dealership sales within a specific region. Nomis' Price Optimizer helps lenders interpret that data and adjust their underwriting based on market conditions.
Using both Nomis’ Price Optimizer (NPO) and J.D. Power’s retail transaction data, which is as fresh as 72 hours, auto lenders are empowered to make more accurate and strategic pricing decisions, thus providing buyers with a competitive, yet attractive offer based on real-time market conditions. When asked how this partnership would impact the current state of pricing in auto lending, our newly minted Senior Vice President of Corporate Strategy and Partnerships Prashant Balepur said:
…auto lenders have "always been fairly agile" and will look at their pricing daily. But this process is labor-intensive when handled through traditional means…Nomis' platform and the integration with J.D. Power streamlines and automates this process…[and] the resulting pricing decisions can be fed into a dealership management system.
As a result, Balepur noted, auto lenders can expect to increase their profitability, on average, by 10 to 25 basis points, and when NPO is used in combination with PIN Navigator, these same lenders can expect to add several more basis points to that realized profitability. What’s more, the insights that NPO provides can also help identify both overpriced and underpriced markets and adjust their strategy accordingly to increase volume alongside profitability.
Given the current challenges facing the auto industry, lenders’ survival hinges upon their ability to win deals in a highly competitive market without sacrificing their bottom lines. The pricing intelligence capabilities from Nomis and J.D. Power enables them to do just that.