Experian’s AutoCheck Market Review Illuminates “Problem Title” Vehicle Loans

A new service from major credit agency Experian is helping lenders to anticipate issues with salvage title vehicles and other used cars and trucks where hidden damage can have an effect on the final outcome of an auto loan.

According to new reports, Experian Automotive, a division of the national credit rating firm, has come up with something called the AutoCheck Market Review that provides an unprecedented level of research assistance for those financing auto loans by combining two previous tools, the AutoCheck tool that searches a vehicle’s history, and the AutoCount resource that gives users more background on the market context by showing numbers for the North American or regional car market as a whole. The AutoCheck Market Review service, then, accomplishes something that Experian feels will boost the lender’s chances of defending a basket of loans against liability from previously damaged vehicles: the resource will help business leaders to assess where damaged auto loans are being made, and to scrutinize the percentages of salvage and damaged titles to get a better look at their own liability and potential exposure to these kinds of undesirable loans.

Experian estimates that half of all of the 40 million used vehicles sold to American consumers every year are financed. According to the firm’s numbers, about 7% of the financed used cars have some sort of title issue, such as a salvage title. Experian staff say that the AutoCheck Market Review tool will help lenders “adjust lending programs, mitigating potential losses.” One might guess that lenders will do this in two main ways, first, by avoiding loans in sectors where bad title loans predominate, and second, by pricing up the loans that they are still willing to make.

Nothing in Experian’s tool kit will help borrowers to get relief from lending up-pricing based on any number of concerns, and the market research tools being presented do more for lenders than for those consumers who need to figure out their own liability with title issues. One way to do this is to always get applicable car history information in writing from the seller. Having service records and other documentation also helps. But another way to hedge against bigger costs is to limit the interest in your financing agreement. This means shopping around for the cheapest auto loans, and knowing what you can get in any given market. Do the research, not just on a vehicle but on your own credit potential, and you could walk away from an auto financing deal richer.