24.9% of all car loans were 73 to 84 months long during the first quarter of 2014 according to Experian. This number continues to grow compared with just a few years ago. And while delinquencies are still at historic lows, how can auto lenders determine when vehicles entering their portfolio are expected to reach a position of equity?

Black Book is working with auto lenders to take a close look at comparative collateral data in order to spot this trend. The company recently leveraged its Collateral Insight Engine technology to compare two different vehicles based on the exact loan terms of 72 months, 5% interest and a 120% loan-to-value ratio.

Based on the data from the example, one achieved a positive equity position in just 37 months, a whole 15 months earlier than the other vehicle (at 52 months). What’s more, the first vehicle had approximately $3000 more equity by month 24 versus that of the second. Knowing the potential loss-given default provides the ability for lenders to become more competitive with their portfolios while mitigating risk. Additionally, that positive equity will pinpoint those loans that are less likely to default, giving lenders yet one more data point to differentiate two loans that look otherwise identical.

Black Book® is best known in the automotive industry for providing timely, independent and accurate vehicle pricing information, and is available to industry-qualified users through online subscription products, mobile applications and licensing agreements. A leading provider since 1955, Black Book has continuously evolved to ensure that it achieves its goal of delivering mission-critical information to its customers, along with the insight necessary to successfully buy, sell, and lend. Black Book data is published daily by National Auto Research, a division of Hearst Business media, and the company maintains offices in Georgia, Florida, and Maryland.