Nomis Blog Lessons from the U.S. Auto Market on Risk-Adjusted Profitability and Pricing

The U.S. auto market is undergoing significant transformations, driven by rising vehicle prices, longer loan terms, and increasing levels of negative equity. These trends have introduced new complexities for lenders, particularly when it comes to optimizing pricing and managing risk-adjusted profitability. Classic approaches to modeling customer behavior and pricing strategies are proving insufficient in this evolving environment, requiring financial institutions to rethink how they approach auto lending.