Open Lending Corporation (NASDAQ:LPRO) Q4 2022 Earnings Call Transcript

Keith Jezek: Well, thank you, Operator. Just as we close, I — if I may I’d just like to share a thought or two on the industry. As many of you know, I have dedicated my entire career, the majority of my entire career serving automotive retail for many reasons, but the most simple is the fact that at trillions of dollars, automotive retail is the single largest non-healthcare related consumer retail on the planet. 93% of households in the U.S. have at least access to at least one car and that far outpaces the number of consumers who own a cell phone or a smartphone at 85%. What we are seeing now is an especially strong cyclical cyclicality and what I have observed throughout my career is that automotive and automotive for cans, in particular, always comes back.

The manufacturers, the OEMs will ramp up production. They will run multiple shifts. They will produce cars and then follow those with wonderful incentives for consumers. Dealers are wildly resilient. They always find a way to put people in cars, whether it would be new or used cars. And lenders, especially where we gain their appetite for auto loans, which are comparatively short duration and exhibit historically very, very low delinquencies. And when the industry comes back, it’s almost always led by used cars, which is good for us, because as we all know, used cars is the primary source of our business. 85% of our volume comes from used, while 15 is from new and it comes back quickly and used and the reason for that is very, very straightforward.

Consumers can defer, delay the purchase of a new car, but they can’t defer or delay the purchase of transportation. And with the average age of the car on the road approaching 13 years, we think there’s phenomenal pent-up demand and so I just wanted to share my perspective, just over my career in the auto sector and couldn’t be more enthused about the future of Open Lending. And with that, I’d like to thank everybody for joining us today.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.