There is more data available in auto finance to use in the decisioning process than ever before, Consumer Portfolio Services Inc. Chief Executive Charles Bradley said, but data isn’t everything.
“Everyone is trying to find their niche,” he said during a fireside chat at the 2016 Auto Finance Summit. “The problem is, it’s very hard to tell how that model works before you buy a bunch of paper. Then you wait 18 months and see how it performs.”
Every lender has a scorecard, but every scorecard is different, he added and it’s often difficult to tell how adjustments to the model can affect the data.
“You think that, ‘if we tweak this just a little bit, then it won’t make that big of a difference,’ then you find out later, it really did,” Bradley said. “Certainly, the customers can be a bit different too, but by and large, even though you have good data, there are still overlying rules that you should follow. Otherwise you can sort of go out on a limb, and then it’s a problem.”
Bradley, who has been chief executive at Consumer Portfolio Services for more than 25 years, spoke at AFS about the abundance of data in the industry, and CPS’s disciplined underwriting practices in the face of an impending downturn.
Hear more from Bradley in the video below — the first in a special video series produced by the Center for Auto Finance Excellence and sponsored by White Clarke Group: