Los Angeles, CA (PRWEB) April 02, 2013
The future of driverless is here, no longer logging hours in a distant lab, but on our streets and highways.
Driverless, or autonomous cars, are vehicles that are capable of navigating and driving without any direct human input. Although the technology is near, the real question is whether the consumer market, the auto loan lending industry, and auto manufacturing companies are ready for the massive change.
In an exclusive interview with loans.org, Sharon Silke -Carty, executive editor of AOL Autos, explained her opportunity to test drive an autonomous vehicle.
The first time she drove a car with adaptive cruise control she was on a track, but eventually she drove the car 65 miles to her job. Since then, she has driven for hundreds, even thousands, of miles. Although she is now more accustomed to the technology, the first time was jarring.
“The first time you do it, you just have to cross your fingers and hope that it works,” Silke-Carty said. “It’s a bit of a mental game. But once it works, it’s great.”
But consumers are not the only group that needs to accept the new technology.
New and used car sales are a $600 billion yearly business in the United States. If the face of the auto manufacturing business changes, then the financing industry for new auto loans will likely change as well.
David Jacobson, CEO of auto loan aggregator company, GrooveCar, said part of the issue could be because there is no evidence of how long driverless vehicles will last, nor how effective they will be. He questioned what the true collateral of this technology is going to be.
“When you finance vehicles with an unknown technology and unknown future value, you don’t know what the value is going to be, so it affects the credit risk,” he said.
Auto loan lenders must assess a vehicle’s worth in the next few years and that gives the loan they lend equity. Equity is the risk management that all car loan lenders need in order to stay solvent.
Jacobson said the risk for driverless vehicles will be similar to hybrids. When they entered the consumer market, finance companies worried about the risk because they were unsure of the durability of the vehicles, the batteries in particular.
“The credit risk is going to have to be carefully assessed,” Jacobson said.
For the full interview and discussion, please read the article at http://loans.org/auto/articles/driverless-technology-autonomous-cars.
Additional articles, interviews, news and frequently asked questions about the auto finance industry are available at http://loans.org/auto.
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