The Auto Finance Roadmap

Last week, the Auto Finance News team rounded out the last of first-quarter earnings results from online retailers Carvana, Vroom and Shift Technologies, all of which posted continued growth on the heels of increased consumer adoption for digital car buying. But how long can this momentum last? In this episode of the Weekly Wrap, Associate Editor Amanda Harris, Chief Executive JJ Hornblass and Edi...

Last week, the Auto Finance News team wrapped up its final event of the spring season, the Auto Finance Risk Summit. Auto lenders from all corners of the industry cited growing affordability concerns as a major looming pain point, with executives from some the nation’s largest auto lenders stating that they were closely monitoring consumer spending habits and evaluating how to bring their workforc...

Rebounding origination volumes, improving recovery rates and strong credit performance have defined the auto finance industry’s first quarter of 2021 for many lenders, but risks related to unused capital and the industry’s recovery trajectory remain. 

The first quarter of 2021 has proved a bright spot after many months of stressed vehicle sales due to the COVID-19 pandemic. Multiple auto lenders saw their auto books reach new levels in Q1 as tight supply coupled with increased consumer demand drove originations. In this episode of the Weekly Wrap, Amanda Harris and Joey Pizzolato discuss Q1 earnings calls of the past week and what's to come thi...

Last week, an Auto Finance News analysis provided a window into electric vehicle financing trends financed on Vroom’s platform, and more banks, such as Fifth Third, PNC Financial and Citizens Bank, posted growth in their auto portfolio on the heels of a global pandemic that was expected to suppress origination volume. In this episode of the Weekly Wrap, Associate Editor Amanda Harris, Chief Execut...

Last week, publicly-traded banks started releasing their earnings reports, and once again, performance remains strong this quarter. Optimism is running high as last week’s jobless claims fell by almost 200,000 and the nationwide vaccine rollout continues to increase while new coronavirus cases remain low.  Still, inventory remains a significant headwind to the auto finance market’s full recovery....

The auto finance industry has recently seen the removal of certain ambiguities in compliance and regulation practices. The U.S. Supreme Court, for one, clarified the definition of an automatic telephone dialing system in its April 1 decision of Facebook v. Duguid, providing auto lenders a better understanding of what an ATDS is, and how to apply that knowledge to their processes. The Telephone Con...

Lenders are coming face to face with the ever-growing need for a strategy for effective specialty recoveries, and no two auto lenders are alike. Auto portfolios have unique complexities and process dependencies that cannot be solved with simple adjustments. These processes require alignment throughout multiple departments to maximize recoveries, and ultimately provide the best survivor experience.

Last week, the Auto Finance News editorial team examined the decrease in incentive spend in February and rising monthly payments in the new- and used-vehicle market, two trends that are likely to continue to be fueled by constricted inventory. Looking forward, will inventory concerns continue to push down incentive spending and increase monthly payments?

Last week, Global Lending Services entered into a pass-through agreement with Nissan Motor Acceptance Corp., and a report from Moody’s Investors Services outlined the upside of the semiconductor chip shortage for securitized loans the auto finance industry. In this episode of the Weekly Wrap, Associate Editor Amanda Harris and Editor Joey Pizzolato discuss the top stories of last week, and what to...

Last week’s Auto Finance Innovation Summit brought the nation’s top lending and leasing executives together to discuss the changing role technology plays in the customer journey. And while many agreed that antiquated legacy systems pose a barrier to innovation, the increased use of data and analytics, connected car technology, and auto finance’s role in electric vehicle adoption present significan...

Last week, Navy Federal Credit Union, the nation’s largest credit union in auto loan volume, announced a new affinity partnership that allows it access to digital retailer TrueCar’s online marketplace of new and used vehicles. Many auto lenders and mobility companies, including Global Lending Services and HyreCar, have entered affinity partnerships with established digital retailers, in response t...

Last week, Amanda Harris took a deep dive into the growing trend of digital refinancing in our March cover story, “Auto refinance enters the spotlight,” examining the driving forces behind the recent uptick in refi volume. Digital refinance has allowed many credit unions and community banks, such as Midwest Bankcentre , to grow their auto books despite an economic landscape that has depressed reta...

Regulatory changes have long been expected with the administration change in Washington, D.C. As the dust beings to settle on the transition, new priorities for Democrats on Capitol Hill are becoming evident — specifically a federal all-in interest rate cap. But how likely is such a bill to pass both the U.S. House of Representatives and the Senate, and what might the auto finance industry have to...

Subprime origination volume in the third quarter of 2020 continues to lag behind 2019 levels, driven by tightened credit boxes and inventory shortages, even as many lenders turn to digital financing solutions to meet consumer demand. But what pieces need to fall into place to help prop up subprime origination volume? In this episode of the Weekly Wrap, Amanda Harris, JJ Hornblass and Joey Pizzolat...

Last week, GM Financial joined Ally Financial and Chase Auto in reporting the surge in fourth-quarter originations that pushed the lenders’ yearend into positive territory. Meanwhile, the virtual NADA Show 2021 concluded last week, where dealers touted the widespread adoption of e-contracting and e-signing capabilities, and Ford Motor announced the launch an online certified pre-owned program.

Last week’s earnings reports in the auto finance industry were marked by new initiatives from Harely-Davidson and Truist Bank, and signs from Santander Consumer USA and Capital One Auto Finance that borrower health may be faltering.

ecent fourth-quarter earnings from some of the biggest players in the auto finance industry paint mixed results in loan performance and origination growth. U.S. Bank, for one, saw an uptick in delinquencies and net charge-off rates, but decreased its total provision for credit losses after building a substantial credit loss allowance during the COVID-19 economic crisis. Meanwhile, Ally Financial c...

Several auto lenders last week announced innovative ways to expand or improve their business. Chase Auto, for one, has joined with electric vehicle manufacturer Rivian, forming Rivian Financial Services. The program will offer digital-first consumer financing with applications submitted on rivian.com. Wells Fargo Auto, too, is investing in technology to increase automation within its loan–approval...

As the country prepares for a shift in leadership, the industry is looking ahead to 2021 and making predictions. Cox Automotive, for one, expects to see tight supply, low interest rates and increased transaction prices. Fitch Ratings forecasts a deterioration in credit performance due to the pandemic. In this episode of the Weekly Wrap, Amanda Harris and Joey Pizzolato discuss the week’s top stori...

The auto finance industry saw multiple partnerships take hold last week. Flagship Credit Acceptance partnered with Pagaya, a fintech asset manager, to add a loan-to-value program to its financing offerings. Vroom, investing funding from its June IPO and September follow-on offering, last week entered an agreement to acquire CarStory, a digital services and analytics company for automotive retail p...

The first half of 2021 is projected to see increased auto originations as the world prepares for the launch of the COVID-19 vaccine as well as car sales driven by pent-up demand and improved inventory. Still, auto lenders must also prepare for a rise in fraud related to originations. Of growing concern is synthetic fraud, in which an identity is created with a consumer’s real name and birthdate ti...

Last week, Auto Finance News announced that its second annual Auto Finance Executive of the Year Award goes to Ravi Raghu, executive vice president of Capital One Auto Finance’s Auto Dealer business. Meanwhile, interest rates have fallen to a three-year low, big U.S. banks are planning to reduce reserve balances through yearend, and the subprime credit segment neared Great Recession lows.

Last week, the Auto Finance News team highlighted an uptick of low-mileage lease options as consumers change their driving habits, which could have lasting implications for both consumers and lessors. Used-vehicle values continued to show seasonal strength, and four issuers injected $4 billion in the auto ABS market after nearly a month of no activity.

Last week, used-car values in the Manheim Used Vehicle Value Index increased once again after a month of decline back toward normal seasonality. Used-vehicle values have squeezed some consumers on the lower end of the credit spectrum out of the market in the third quarter, according to Credit Acceptance Corp.’s Chief Executive Douglas Busk. CAC logged an 8.8% year-over-year decrease in origination...