Getting more people on the road: Unlocking new opportunities for AI-powered credit modeling in the automotive and mobility industries

The world of transportation is changing. Electric vehicles are becoming mainstream, alternative mobility options are booming, and the traditional credit score is no longer the only key to the driver's seat. This presents both challenges and opportunities for lenders in the auto and mobility industries.

This is where AI-powered credit modeling comes in, and Underwrite.ai is uniquely positioned to serve the diverse customer base of auto lenders, auto funds, and mobility dealers. Traditional credit scores often paint an incomplete picture, especially for underbanked populations or those new to the credit system.‍

Beyond the credit score: A more comprehensive view of creditworthiness

Historically, credit risk modeling has been based solely on credit history data, which often falls short in predicting loan repayment outcomes. Not to mention, the majority of the world’s population does not have a credit score.

Underwrite.ai goes beyond the limitations of traditional credit scores by analyzing a wider range of data points. This includes factors like:

• Payment-to-income ratio: Shows how much of your income goes towards bills, offering a clearer picture of affordability.
• Insurance history: Responsible insurance habits can indicate responsible financial behavior.
• Car details: Make, model, and engine life can all provide insights into potential loan risk and value retention.

With AI, we can efficiently evaluate this vast amount of data, creating a more nuanced picture of an applicant's creditworthiness. This frequently means an increased number of approved applications with little to no increased risk to the lender due to the strong predictive accuracy of our algorithms.

A new approach to credit modeling for a changing auto and mobility market

How we get around is changing. Electronic mobility options such as e-bikes, mopeds, and scooters continue to grow in popularity. In fact, these are often a vital transportation option for underbanked populations. Gig-work is driving car sales as a business investment rather than a personal expense only. Whether customers are looking at transportation options due to want or need, Underwrite.ai is positioned to serve this diverse population.

Auto Lenders

In the highly competitive automotive industry, both buyers and sellers are motivated by speed and accuracy in credit decisions. Underwrite.ai enhances both, helping lenders increase profits by reducing loss rates and identifying new opportunities.

One example of this success comes from our partnership with a major subprime auto lender in the UK. While their charge-off rate was low, their underwriting process took 2-3 days. By reverse-engineering their manual underwriting system, we replaced it with an AI-powered process capable of making decisions in 2 milliseconds. This model operates at 10 times the loan throughput of 150 human underwriters with prediction accuracy greater than 98%.

Auto Funds

Similar to lenders, for auto funds, managing risk and improving operational efficiency are critical to success. Underwrite.ai enhances these functions through advanced AI algorithms that analyze thousands of data points to improve predictive accuracy, lower default rates, and expand loan inclusivity.

Our expanded approach to assessing the creditworthiness of applicants, especially for those in underserved markets, allows auto funds to expand their purchases while maintaining low default rates​​.

Mobility Dealers

Electronic mobility options are growing in popularity, particularly for those in urban areas who don’t want to solely rely on public transportation but need an alternative to the higher expense of a car.

Our platform is particularly beneficial for underbanked populations who may lack traditional credit history but have other relevant data points that can be analyzed to assess creditworthiness. By delivering a more accurate and inclusive risk assessment, lenders can offer flexible loan terms, helping more people access e-mobility options.

Building a more sustainable and equitable transportation system

The work we do with our automotive and mobility clients is a perfect example of why we do what we do at Underwrite.ai. By applying nonlinear credit modeling that goes beyond the limitations of traditional credit scores, auto and mobility lenders are expanding financial inclusion and growing the market. Expanding credit access for transportation options will grow your lending profits and contribute to our economy's growth by getting people where they need to go safely and efficiently. And that is a win for lenders and consumers alike.