NMAC Eyes Opportunities in User-Based Leasing

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Connected car technology offers a unique opportunity to revolutionize traditional finance, such as offering user-based insurance and leasing, Kevin Cullum, Nissan Motor Acceptance Corp.’s president, told Auto Finance News.

User-based insurance (UBI) “has great momentum behind it,” he said, and that technology could roll over to auto finance along the lines of user-based leasing.

UBI — also commonly known as pay-as-you-drive auto insurance — is a type of vehicle insurance whereby the costs are dependent upon the type of vehicle, measured against distance, time, behavior, etc.

Meanwhile, user-based leasing is “an example of how the car can actually communicate to our receivable system to allow the customer to drive and bill them based on how many miles they are driving, how they are driving the vehicle, and tying their insurance and lease payment into the actual usage of the car,” Cullum said. “This will help us significantly manage residuals better. The sensors in a car can advise us when a vehicle is an accident when it’s been repaired, whether maintenance is being performed, course tracking mileage — all these things can communicate to the receivable system which will give that customer really the best and customized lease payment for them.”

Cullum said he is “not a huge fan” of multiple borrowers in a shared vehicle, but he is a fan of ensuring the consumers have the flexibility to pay for what they use in automotive. “To me subscriptions, shared leasing, and car-sharing are all great commercial opportunities for a fleet management company — who NMAC would welcome supporting — but that customer interface is not really our core business,” Cullum added.

“However, with connected car technology that Nissan is really driving is opening up a tremendous opportunity for us and for our customers, and the enhancement in what we call traditional financing and leasing. … When it comes to tech and mobility, I really see that area of business [user-based leasing] as growing and as an opportunity.”

Cullum, who was previously general manager of Nissan Canada Finance, took over as NMAC president Aug. 1. He replaced Mark Kaczynski, who became vice president of administration and finance for the company’s luxury brand Infiniti Motor Co.

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