There has been a radical transformation in the Automotive Used Car Sales and Rental industry driven by changes in ownership patterns over the last few years. The dynamics of this billion dollar industry has seen a paradigm shift from being totally sales driven to being profitability focused in this dynamic and highly competitive environment. This emerging landscape has made it inevitable for companies in this industry to reinvent the wheel and drive profitability through innovative and fact based market decision making capabilities.
Our Industry specific Customer Analytics & Modeling solution includes:
Application Bad Debt Predictive Model: Using the data available at the time of issuance of loan, a model is developed to predict whether the loan will turn profitable or unprofitable. The output is presented as a score - higher the score more the likelihood of the customer turning profitable thus leading to segmentation of customers. This helps you identify fraud at the application level and thus helps you avoid losses.
This model is built to identify the customers who repay their loan before their tenure. Prepayment is good for the borrower because it relieves him/her of the debt, but it deprives the lender of interest he/she would have received otherwise. The Pre- payment model helps the client identify these customers at the application level itself and helps them take proactive measures(High interest rate, Pre-Payment Penalty etc.) to counter the likely loss due to pre-payment.
Early warning Delinquency Model:
The objective of this model is to raise early alerts about the customers who are most likely to default or most likely to miss the payment in the next collection cycle. This helps in early identification of the risky customers during the life cycle of the loan so that proactive action could be taken. The technique helps you map monthly losses that are caused by defaulters.
Portfolio valuation is a must-have solution when buying/acquiring a portfolio. Using the data available at the time of acquisition e.g. monthly recovery pattern of portfolio, profile of the customers, and value of collateral (if any) the hidden risk in the portfolio is unleashed and the recovery amount from the portfolio is realized. Valuation when performed along with LTV provides a comprehensive view of the portfolio risk.
Life time Value Model:
Using the historic payment data, we develop models that predict the life time value (LTV) of the portfolio. Using statistical/econometric model LTV is calculated at both customer and portfolio level depending on the data availability. The model helps you evaluate the life time value of the portfolio.
Optimization of the interest rate for the loan:
The customer profile data when integrated with bureau data provides a way to calculate customized rate of interests for each customer based on the risk- factors attached with the customer profile. The model provides an optimal rate-of-interest that is optimal for the lender and also aligned to the customer needs.
The Response model is the key to customer acquisition. The objective is to predict the likelihood of the customers to buy the product. We help you optimize the customer acquisition cost using the data at customer acquisition level.
Market Equations India offers results oriented Customer Analytics and Modeling Services for Rental and Used Car Auto dealerships to include and not limited to Application Bad debt predictive models, fraud detection model, pre-payment model, early warning delinquency model, portfolio valuation model, Life Time Value (LTV) model, Interest optimization model and response model and other custom data modeling techniques. Market Equations combines in-depth industry knowledge, advanced analytics expertise and the latest technology to deliver solutions that enable our clients take better and enduring fact based business decisions. Market Equations help organizations retain customers, manage risk, minimize cost, increase revenue generation and maximize returns.
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