Automobile and Powersport Vehicle financing are intricate domains. Borrower behaviors and economic realities combine to present countless risks. Enablement strategies that cover this landscape’s variety and dynamic nature often serve as the core foundation for successful partnerships between lenders, loan servicers, and borrowers.
Unpacking the Auto and Powersports Borrower:
Every borrower represents a unique blend of financial behaviors and risks. In order to develop a strong training program for a nuanced industry, one must first understand the full context of its participants.
From the urban commuter to the rural adventurer, dissecting borrower personas can help gauge differing risk profiles and potential credit challenges. For example, a luxury car buyer might prioritize monthly payment flexibility, while an ATV enthusiast could be more concerned about long-term financing stability. Each borrower has their own unique needs, so teaching loan servicing representatives to seek an understanding of the motive behind each purchase can help them determine their approach to supporting them.
Additionally, delving into the financial trajectory of vehicles—from initial purchase to eventual resale or trade-in—offers a lens into potential asset-based risks. Fluctuating market trends are worth informing your teams of, as they can shape a more tailored servicing approach.
Foresight enhances the efficacy of employee training and can help prepare representatives for real-world challenges. Lenders and loan servicers can incorporate material on risk assessments into their enablement programs to better prepare their representatives to uncover potential challenges based on real-life examples from previous interactions.
One way to approach this is by benchmarking and training for key conversations in a customer journey. Building a proper framework for something like a welcome call to ensure representatives are asking the right questions when they are first getting to know the borrower can help uncover information and potential risk factors that are not always immediately accessible.
Through interactive simulations and roleplay exercises, representatives can be taught to anticipate and handle a number of scenarios that other team members may have encountered in the past.
Unique Terrains in Powersports:
Given their recreational nature, powersport assets can entail distinct financial dynamics that differ from more generic borrowing scenarios. Understanding the motivations behind these purchases can reveal insights into borrower commitment and associated default risks.
Many of these particular assets are purchased with recreational intentions, meaning the borrower’s perspective of their obligation may differ from how they would perceive a commitment related to a necessity, like an automobile.
For example, someone may feel less compelled to resolve a default for a jetski or a recreational vehicle (RV) than the car they use to commute to work daily. Understanding what may be at stake for the borrower, although situations can still vary on a case-by-case basis, can often yield more successful outcomes.
Regional tourism booms or economic downturns can uniquely impact this asset class and borrower repayment capacities. Ongoing training on current events and shifting economic trends not only assists at the moment with the examples at hand but encourages the behavior to remain informed on these changes on an ongoing basis.
The Subtle Art of Perception:
Risk indicators can be implicit, requiring a heightened intuitive awareness from representatives. This trait is often learned, especially in more niche territories like automobile and powersport loans.
Cultivating an environment that encourages deeper borrower connections can unveil concealed financial challenges or forthcoming risks. Conducting workshops to discuss and build interpersonal skills can create a space for discussions on the variety of scenarios that representatives encounter on a daily basis and how to manage them. Peer-to-peer learning is generally invaluable, especially when it comes to building people skills for risk management.
Using these sessions to explore past loan cases, especially those that presented unexpected risks, can offer foresight for the rest of the team and provide tangible examples from trusted resources on navigating them. A representative may encounter something that is entirely unique to the borrower and their particular loan, so a culture that fosters a “hive mind” attitude can make all the difference.
The idea of risk is continually evolving, meaning enablement strategies must evolve at a similar rate. Engaging with shifting market trends, regulatory changes, and technological innovations can keep representatives abreast of emerging risk patterns.
Routine enablement programs beyond initial employee onboarding are crucial for keeping representatives informed, which can help ease the discomfort of dealing with ambiguous or uncharted territories. In many cases, the function of education on this aspect of the borrower journey is less about the direct example at hand and more a demonstration of a company’s commitment to ongoing refinement. Proving this can make a difference in a representative’s composure when they are presented with the unknown because they can trust that they will not be alone in finding a solution.
While this industry is full of scenarios that present themselves for the first time, regularly updating training to include more of these examples and other changes can help broaden a representative’s awareness of potential challenges and how to overcome them.
Insights from the field can be instrumental in refining risk management strategies. Establishing a reliable system for feedback and open dialogue can help centralize and analyze risk encounters from the ground up. An environment that encourages positive, constructive criticism instills a culture of continuous improvement instead of one that scrutinizes mistakes.
Integrating these real-world insights into employee training can ensure your representatives remain aligned with their environment. Embedding risk awareness and strong interpersonal acumen into these programs is standard practice at Servicing Solutions and one in which we take great pride. As the industry advances, organizations prioritizing risk-informed training position themselves at its forefront, crafting safer, more stable financial futures for borrowers, lenders, and loan servicing providers alike.