By Tom Ballard, Chief Alliance Officer, PYA
If you’ve ever bought an automobile or truck, you know that it has something called a VIN. That’s shorthand for Vehicle Identification Number, and each car or truck has a unique one.
You have to use it to register the vehicle and secure insurance. Like your social security number, the VIN stays with the vehicle when it is sold, repossessed or scrapped.
Did you ever stop to ask yourself, “What is included in the VIN information?” You might be surprised that it varies by manufacturer. The 17-character code – a combination of letters and numbers – details information including country of origin, make and model, year manufactured. Typically, the information is limited and missing key data related to proper identification and determination of value.
“Some don’t code everything such as trim or options like a technology or sports package,” Sean Smith, Founder and Chief Executive Officer of Auto I.D. Inc., told us during a recent interview. The result is a challenge for lenders, dealers, manufacturers, and even consumers to accurately identify and determine the value during vehicle transactions.
Addressing that challenge is where the Nashville-based company comes in, using a vast database and analytics to provide real-time information on a specific vehicle’s value to banks, financial institutions and other lenders.
Although Auto I.D. Inc. was officially founded in 2012, Smith says product development took three years before he signed-up his first customer in 2015. Today, he says proudly that “our company is able to provide a first to market solution that has given some of the top 10 vehicle lenders the ability to recover millions of dollars in previous losses and changing the way they do business.”
That wasn’t always the case.
“No one believed us when we told them they had a problem,” Smith said in terms of incorrect vehicle values. Yet, that is what Auto I.D. Inc. has shown.
The loan value of a vehicle is based on the VIN, coupled with information that comes from the dealer or consumer. Let’s say the information is inaccurate, listing options that are not actually on the vehicle. The bank lends money to a consumer based on the value it calculates that, in turn, is based on the available information.
Then, let’s say the consumer defaults on the loan and the vehicle is repossessed. Who is left holding the bag for the difference between the unpaid loan balance and the actual value of the vehicle when the loan was based on incorrect information? It could be the consumer, the dealer or the lender. Avoiding those situations by providing full and accurate information is the focus of Auto I.D. Inc.
“Enter the VIN and mileage of a vehicle and within seconds get the exact manufacturer build configuration and equipment detail for the vehicle, merged with real-time evaluator book values,” the company proclaims on its website.
Look under the hood, and Smith says customers will find a “very comprehensive database” provided by the vehicle manufacturers that goes back to 2004 models and separate sets of data provided by lenders.
“Our technology does the heavy lifting,” he explains. “It identifies discrepancies in information between the manufacturer and the dealer. We do it in a sensitive way so as to not undermine relationships.”
The idea for Auto I.D. Inc. grew out of a list of inefficiencies that Smith saw during a 15-year career on the retail side of the automotive sector. After vetting several ideas with others, he settled on addressing the matter of vehicle values.
“I had to take a leap of faith,” he says. His first few clients were smaller regional lenders and now Auto I.D. Inc. has some of the largest lenders in the country.
“We ran very lean for the first three years,” Smith says, adding proudly that he “always used investor resources like they were our own money.” He also stated that “a key to the company’s success is in being very diligent to hire and partner with the best and brightest people possible who are very passionate about the company”.
Auto I.D. Inc. is growing. A year ago, it had five employees. That number has grown to 22.