Weekly Payment Escrow System for Auto Loan Principal Reduction

Resolve Bottlenecks,
Find Innovative SolutionsGenerate Solutions

Solution Overview

Problem

Current online systems for selling used vehicles often result in low offers due to the 'wholesale up' method, disappointing customers and potentially losing deals, while traditional financing arrangements make it difficult for buyers to afford vehicles, leading to reduced sales for auto dealers.

Innovation Solution

The Max Allowance system provides a detailed online conversion tool that uses a 'retail down' pricing system, allowing customers to input extensive vehicle details for auto dealers to make informed offers, and the Advantage2U system allows weekly payments to pay down vehicle loans faster, increasing purchasing power.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If the 'wholesale up' method is used to generate offers, then auto dealers can determine offers based on wholesale value, but the offers become lower than necessary for dealers to earn desired profit

Engineering Contradiction:

Improveoffer accuracyVSAvoiddeal closure rate

Core Design Contradiction:

Measurement precisionVSProductivity

Solution Approach 1:

The patent inverts the traditional 'wholesale up' pricing method by implementing a 'retail down' approach. Instead of starting from wholesale value and adding markup, the system starts from the retail price and subtracts costs and desired profit to determine the maximum offer. This inversion allows dealers to maintain accurate cost-based pricing while ensuring offers are high enough to close deals.

Inventive Principle:

Principle #13The other way round (Inversion)

Solution Approach 2:

The system changes the pricing parameter from wholesale-based to retail-based. By using retail price as the starting point and working backwards through cost structure (reconditioning, transportation, overhead, profit margin), the system transforms the offer calculation methodology to simultaneously achieve accuracy and competitiveness.

Inventive Principle:

Principle #35Parameter changes

2Ease of manufacture

If traditional monthly financing arrangements are used, then loan terms are standardized, but buyers find it difficult to afford vehicles

Engineering Contradiction:

Improvefinancing simplicityVSAvoidaffordability

Core Design Contradiction:

Ease of manufactureVSEase of operation

Solution Approach 1:

The patent segments the traditional monthly payment structure into weekly payment intervals. By dividing the monthly payment amount into four weekly payments, buyers can manage cash flow more effectively with smaller, more frequent payments that align with weekly payrolls, thereby improving affordability while maintaining the same financing terms.

Inventive Principle:

Principle #1Segmentation

Solution Approach 2:

The system introduces dynamic payment scheduling that adapts to buyer cash flow patterns. Weekly payments provide flexibility and liquidity management benefits, allowing buyers to adjust to their financial cycles while the dealer receives the full monthly amount needed for loan servicing.

Inventive Principle:

Principle #15Dynamics

3Ease of operation

If online offer systems are implemented, then customers can locate dealers remotely, but offers become sufficiently low that customers are disappointed and deals are lost

Engineering Contradiction:

Improvecustomer convenienceVSAvoiddeal conversion rate

Core Design Contradiction:

Ease of operationVSProductivity

Solution Approach 1:

The patent introduces an automated online valuation system as an intermediary between customer and dealer. This system uses retail-down algorithms to generate accurate, competitive offers remotely, maintaining the convenience of online interaction while ensuring offer amounts are sufficient to convert leads into deals.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system provides immediate feedback to customers through automated offer generation based on their vehicle information. By using retail-based pricing that accounts for all dealer costs and profit requirements, the feedback (offer amount) is both accurate and competitive, preventing customer disappointment and deal loss.

Inventive Principle:

Principle #23Feedback

Data Source

PatentUS11625775B2System for collecting weekly payments from a customer, holding those weekly payments in escrow, and then making monthly loan payments toward the customer's auto loan using the escrowed payments

Publication Date: 2023.04.11 FRAZER IP LLC

AI summary

The Advantage2U® system is an on-line system that increases the buying power of customers, enables customers to pay down a vehicle loan more quickly than the standard payments for the loan term would allow, and enables customers with negative equity in a vehicle loan to more quickly reach a position of positive equity. The Advantage2U system accomplishes this by collecting weekly payments from customers, instead of monthly payments from the customers. Since vehicle loans require monthly payments, the Advantage2U system collects one quarter of the total monthly payment per week. However, since this results in the customer paying one quarter of the monthly payment for 52 weeks in a given year, instead of the customer making 12 monthly payments, the customer has effectively made 13 monthly payments in a given year, and the extra amounts paid are directly applied to the principal of the loan.