The Auto Finance Roadmap

BMW Financial Services’ lease penetration has normalized following the elimination of the federal electric vehicle tax credit, says Ole Jensen, chief executive and president of the captive in North America.   “We [have] slightly higher penetration when it comes to [battery EVs] in terms of leasing, because a lot of people [are] maybe uncertain about if they like the car, if they like the technolog...

Car buyers are facing a tough market as rising insurance costs add to vehicle ownership expenses and lenders are mindful of high loan-to-value ratios.   The national six-month auto insurance premium rose 7.5% year over year to $1,163 in May, with the average up 20.6% YoY to $1,263 in the first quarter. Individual borrowers’ insurance premiums are difficult for auto lenders to track, creating a cha...

Auto retailers are gaining momentum on the heels of increased sales and finance volume even as the industry navigates continued affordability headwinds.   Carvana last week opened its first test-drive center in Dallas after acquiring seven Stellantis dealerships to expand into new-car sales.   The Tempe, Ariz.-based retailer sells new and used vehicles online and reported a 40% year-over-year incr...

Carvana has lowered its interest rates as its profitability, sales and finance volume improve.  The Tempe, Ariz.-based retailer in the past year has focused on expanding inventory to meet consumers’ needs as car prices rise, improving customer experience and using AI to streamline transactions, Matt Dundas, vice president of finance, tells Auto Finance News during a special episode of “The Roadmap...

AI-powered research tools are changing how consumers shop for powersports vehicles, prompting dealers to spend more time explaining financing options and correcting misconceptions about rates, promotions and pricing.  Consumers are increasingly arriving at dealerships with information gathered from online searches and AI platforms , creating both opportunities and challenges for finance managers,...

Used-car financing gained ground in the first quarter as affordability pressures continued to push consumers away from higher-priced new vehicles.  Used vehicles accounted for 58.6% of all auto financing in Q1, up from 58.2% a year earlier and marking the first Q1 increase since 2023, according to Experian .   The shift underscores a broader affordability challenge facing the auto industry as aver...

The higher cost of living is exacerbating affordability concerns and prompting auto lenders to take a close look at rising delinquencies, asset pricing and innovative programs to get consumers into vehicles.   The inaugural Auto Finance Capital Summit in Nashville, Tenn., highlighted lenders’ reliance on diversified funding sources across asset-backed securitization (ABS), warehouse lending and pr...

Powersports dealers are introducing financing discussions earlier in the buying process as affordability concerns and economic uncertainty shape consumer behavior during the industry’s peak selling season.  May is one of the most important sales periods for powersports dealers as warmer weather drives demand for motorcycles, ATVs and side-by-sides, Synchrony Outdoors Senior Vice President and Gene...

In the first quarter, the auto finance industry balanced strong auto loan originations with persistent affordability challenges, shifting EV demand and rising asset-backed securitization activity.  Auto lenders, including PenFed Credit Union , Driveway Finance and Carvana posted strong first-quarter gains, signaling continued demand for auto loans, according to their earnings releases last week. P...

Consumer budget concerns are driving year-over-year surges in auto refinance applications, Strati Papageorge , senior vice president of product at PNC Financial , tells Auto Finance News in the latest episode of “The Auto Finance Roadmap” podcast. “Affordability is No. 1, the biggest reason that consumers are coming to us,” to refinance, he said. “It helps with monthly payment.” PNC reported a 60%...

Lenders’ auto originations were mixed in the first quarter, though most reported declining delinquencies. Originations reported by major banks include: Ally Financial , up 12.8% YoY to $11.5 billion; CarMax Auto Finance , down 1.5% YoY to $1.9 billion; Chase Auto , down 2.8% YoY to $10.4 billion; U.S. Bank indirect loan and lease production, mostly made up of auto loans, up 47.3% YoY to $1.7 billi...

Auto lenders and dealers are navigating mounting pressure in 2026 as inflation, geopolitical conflict and regulatory shifts weigh on profitability and consumer behavior.  Auto lenders are responding to tighter margins by strengthening dealer relationships and expanding into full-spectrum financial services. Technology also continues to improve efficiency and credit decisioning, resulting in increa...

Auto lenders are working to balance growth against rising credit and affordability pressures as the market adjusts to shifting consumer behavior in 2026.  Luxury vehicle financier Rizz Lending this month secured a $300 million warehouse facility to scale originations to about $200 million this year. Meanwhile, fintech lender Lendbuzz is targeting 20% growth in originations by adding near-prime bor...

Continued concerns around the Iran war and an increase in fraud schemes are placing more stress on auto lenders, dealers and consumers while driving shifts in risk management and strategy.  The war has pushed oil prices above $100 per barrel, fueling inflation and widening auto asset-backed securities (ABS) spreads . Prime spreads have widened by up to 17 basis points, increasing funding costs and...

AI adoption is changing how auto finance companies approach efficiency gains and how the industry scales, Sanjiv Yajnik, president of financial services at Capital One, tells Auto Finance News in the latest episode of “The Auto Finance Roadmap” podcast.   “The rate at which we are innovating right now, given AI, is unbelievable,” he says. Technology and AI-based tools are making processes faster a...

The auto finance industry continues to navigate heightened economic uncertainty as the Iran war drives oil prices higher, adding pressure to consumers already facing elevated vehicle prices and borrowing costs.   Crude oil prices surged above $100 per barrel to end last week amid fears of supply disruptions around the Strait of Hormuz, a critical route for roughly one-fifth of global oil shipments...

Despite a rise in subprime financing share in the fourth quarter of 2025, affordability remains a key focus for auto lenders and dealers as lower-income consumers continue to be disproportionately affected by higher everyday costs.  Subprime share of total vehicle financing in Q4 2025 stood at 15.3%, up from 14.5% a year earlier, according to Experian data. Prime borrowers continued to lead market...

Auto lenders are eyeing AI and other digital technologies amid continued industrywide concerns over affordability pressures. Chase Auto will deploy AI that can fully automate the contract booking and funding process in 2026 . AI-powered Fintech Agora Data closed a deal on Feb. 26 with blockchain-based platform provider Figure Technologies to tokenize auto loans into real-world assets for investors...

Drivers underestimate the cost of owning a vehicle by nearly $4,500 a year, underscoring mounting affordability pressures across the auto market.  There is a growing disconnect between consumer expectations and the rising expenses tied to maintenance, repairs, insurance and everyday vehicle use, Keith Mait, senior vice president and general manager of Synchrony Financial’s auto business, told Auto...

Auto dealers and lenders are looking to new technologies and ventures to grow operations as the retail auto market faces uncertainty, especially around used vehicles and EVs, in 2026.  Dealer captive financier AutoNation Finance ’s originations rose 66% year over year in 2025. Meanwhile, the retailer’s full-year finance and insurance revenue increased 7.7% YoY to $1.5 billion, which represented 5....

Auto and powersports financiers mostly reported lower originations and sales for the last quarter as shifting spending patterns by cash-strapped consumers fuel uncertainty.  Lenders that reported fewer sales and loan originations, according to their respective earnings releases, include:  Credit Acceptance Corp. ’s consumer loan assignment volume , down 9.1% year over year in its fourth quarter; ...

Banks reported growth in auto originations in the fourth quarter as credit performance was mixed.   Auto originations at Ally Financial, Capital One, Chase Auto, U.S. Bank and Wells Fargo increased year over year, according to the banks’ earnings reports.  The increases were:   Ally’s originations rose 4.9% YoY to $10.8 billion;  Capital One’s originations increased 8.5% YoY to $10.2 billion;  Cha...

Gaps in data verification likely contributed to missed double-pledging of assets at Tricolor Auto, prompting changes at rating agencies, Larry Chiavaro, president at his consulting company LC Advisors Group, told Auto Finance News during a special recording of the Weekly Wrap podcast.   Chiavaro also served as executive vice president and co-founder of First Associates Loan Servicing from 2010 to...

Auto dealers are expecting a strong tax season to spur a sales jolt early this year, but lenders and dealers are split on their full-year outlook amid rising vehicle prices and macroeconomic challenges facing consumers.   Other factors that market participants are monitoring include how fluctuating interest rates and unemployment will affect consumer affordability and car sales.  In fact, December...

An uptick in repossessions, continued affordability challenges and weakened credit performance are top of mind for lenders headed into 2026.   The shutdown of several lenders this year combined with inflationary pressures is likely to contribute to more repossessions at the end of 2025 and in early 2026. By Dec. 31, repossession assignments nationally are projected to surpass 10.5 million units fo...