Diversify your portfolio with auto debt using vehicle location data for collectability. By Stephen Nethery
Auto debt doesn’t rank high on most Debt Buyers scorecards. But what many don’t realize is that they may be missing out on collectable portfolios that can drive results and revenue.
Why does auto debt get a bum rap? Here’s what buyers tell us:
- We don’t know how to collect auto debt, so we avoid it.
- Often, there is a gap between originators asking price and our evaluation of the debt’s worth.
- We don’t want to risk any compliance issues.
Collect on auto debt using vehicle location data.
Vehicle Location Data collected from billions of license plate sightings across the U.S. provides new ways to connect with debtors and collect. In fact, DRN has found that 90% of the time, debtors are within 1,000 feet of their car. So if you can find the car, oftentimes you can find the debtor and establish a payment plan or recover the vehicle if necessary. And when the vehicle sightings include phone numbers and addresses you have more data – data that goes beyond the typical Comp Report, data that drives results for auto debt collection.
Score for collectability and close the price gap.
That same vehicle location data can help close the pricing gap between the originator’s price and the debt buyer’s evaluation by using the data to score a portfolio for collectability. Imagine scoring each address associated with each loan in the portfolio to determine whether it is likely a good or bad address to connect with the debtor or recover the vehicle. Now you have collectability data – data that can help you to price that portfolio. For portfolios with strong address scores indicating above average collectability, debt buyers can be more confident in submitting a higher bid. On the flip side, for portfolios with weak address scores, debt buyers can use the data to negotiate a lower price.
Avoid Compliance Risk
Providing basic vehicle information (VIN and/or license plate) keeps you within NPPI compliance. And in order to get the vehicle location and analysis you must adhere to the Drivers Privacy Protection Act (DPPA) for permissible purpose. DRN maintains strict controls over the data we gather and abides by all regulatory guidelines to ensure the security of our data. This includes adherence to the DPPA, ongoing alerts to ensure system security and availability, 24-hour data center security, and access audits to prevent unauthorized data access. You can view our Privacy & Security Statement here.
They say knowledge is power and when it comes to debt buying, knowledge is the power to know before you buy. Join DRN’s Jeremiah Wheeler, VP of Auto Finance, at the upcoming DBA International Conference on February 11, at 9:00 a.m. for the panel discussion: Increasing Recoveries through New Technologies. https://www.dbainternational.org/events/2016-annual-conference/agenda/
