As new car prices increased buyers faced putting more down or higher monthly payments. As these options strained affordability lenders stepped in to help by extending loan terms to ease monthly payment pain. Combined with low interest rates car buyers have loaded up on auto loan debt post-recession.

Do these loans perform differently than loans with shorter loan terms? That's something that your CECL analysis and loss forecast will clearly show. Of course, it will be important to compare apples to apples. This includes borrower and loan characteristics including:

The CECLNow drill down tool will support analysis of key variables like these so that you can identify significant differences in performance by segment. In addition, with benchmarking you can view more stable segment performance. This will be especially valuable for smaller portfolios and cases where you have limited vintage performance data.

Any time you create a new product or add a product variation it is important to monitor vintage performance.  Quickly identifying major differences will support prompt action to adjust strategies. This may range from modest tweaks to decisions to aggressively expand or stop doing business in this way. It's generally best to tread lightly when starting out. Measuring performance against expectations and other segments will guide your next steps.

The lesson:  Try many things and measure carefully and consistently.