The Auto Finance Roadmap

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...

This week, the Auto Finance News team took a deep dive into third-quarter earnings for auto lenders and found that, overall, the industry is seeing further signs of recovery.  In this edition of the Weekly Wrap, Amanda Harris, JJ Hornblass and Joey Pizzolato discuss these news developments for the week ending Oct. 30 and what’s on the horizon for next week. 

This week, the Auto Finance Summit was in full swing, and a resounding theme among executives in the industry was one of cautious optimism. Initial forecasts surrounding the fallout of the coronavirus pandemic haven’t yet come to pass, as the third quarter was marked by strong credit performance, origination volume and used-vehicle values. Still, peak credit losses are expected in 2021, which coul...

This week, the Auto Finance News team discussed third-quarter earnings for some of the major publicly traded banks, and found some positive trends. In this edition of the Weekly Wrap, Amanda Harris, JJ Hornblass and Joey Pizzolato discuss news developments for the week ending Oct. 16, and the auto industry’s future, as well as what’s to come during the Auto Finance Summit next week.

Auto finance industry professionals are keeping a close eye on demand for new and used vehicles, digital tool adoption and potential leadership changes at the Consumer Financial Protection Bureau as the year winds down. In this edition of the Weekly Wrap, Amanda Harris, JJ Hornblass and Joey Pizzolato discuss these developments for the week ending Oct. 2, and highlight stories to come next week.

This week, the Consumer Financial Protection Bureau announced an uncharacteristic enforcement action against subprime lender Lobel Financial, columnist Marcie Belles penned an analysis on regulators increased interest in the subprime lenders, and fresh synthetic fraud data further illuminated the growing fraud problem in auto finance.

Auto lenders continue to experience ups and downs through the COVID-19 pandemic, and it’s becoming clearer by the week what changes are in store for the industry. Still, industry players have found creative ways to navigate the pandemic.

This week, the auto finance industry may be reaping the benefits of lenders and dealers adapting to offer digital car buying solutions during the height of the COVID-19 pandemic. Lenders supported dealer partners and ensured continued cash flow as the pandemic closed dealerships and car sales struggled. New York may be a potential example of recovery as the top 10 auto lenders in the state recorde...

This week, all signs point to the continued recovery of the auto finance sector as the unemployment rate dipped to 8.4% and consumers continued to make partial payments on loans in extensions status.

This week, the auto industry is eyeing potential increases in delinquency rates as long-term deferrals come to an end. Since the COVID-19 pandemic hit the country in March, lenders have made it a priority to help consumers with two to three-month long payment assistance programs. The industry now is seeing payment extensions on securitized auto loans decline, along with the percentage of auto acco...

This week, the news cycle was dominated by the Democratic National Convention and former Vice President Joe Biden’s presidential nomination amid increasing jobless claims following two straight weeks of decline. On the auto finance front — and against the now-constant backdrop of the pandemic — the Auto Finance News team took a deep dive into the emerging trend of online financing, the health of t...

This week, Carvana reported that it was maintaining its tighter credit underwriting policies, an emerging trend Auto Finance News first reported last week in the Federal Reserve’s senior loan officer survey, and one that could well extend into 2021 amid uncertainty surrounding the coronavirus pandemic.

This week, Ford Motor Credit propped up Ford Motor Co. ’s second-quarter performance with strong consumer loans and leases, and low delinquency rates as major banks tightened credit underwriting standards. Still, Ford Credit increased its allowance for credit losses in anticipation of the end to extension programs and continued economic fallout from the COVID-19 pandemic. Lenders will need to be r...

This week, second-quarter earnings wrapped up on a positive note with presentations from GM Financial, Santander Consumer USA and Harley-Davidson. An Auto Finance News analysis also found that Carvana took the top spot in auto finance ad spending during the coronavirus-dominated quarter.

This week, the Auto Finance News team took a deep dive into how the pandemic is affecting subprime lenders. Auto, however, may shine bright in the coming months. Capital One saw an increase in auto originations that helped boost the bank’s overall second-quarter performance, and captives gained 8 points in market share as a result of 0% APR incentive programs. However, the bank, in line with indus...

This week Bank of America, Chase Auto, PNC Financial, U.S. Bank and Wells Fargo Auto all reported increases in allowances for credit losses despite a dip in delinquencies and charge-off rates, a trend the banks are largely attributing to robust deferral programs aimed to slow the economic damage wrought by COVID-19. In fact, many auto lenders have now transitioned to case-by-case deferral programs...

This week, Auto Finance News took a deep dive into the driving factors behind the goals of two fintech lenders entering the auto finance space on the heels of pandemic-driven growth. We also looked at the Manheim used-vehicle value index, which soared to record highs in June, and explored how consumer complaints with the Consumer Financial Protection Bureau last month reflected coronavirus-related...

This week was ripe with news on the innovation front, as Ford Credit outlined the details of its new financing product, the Ford Option, and Upgrade, a personal loan fintech, has plans to enter the auto finance market this year with its sights set on $1 billion in new loan originations. Meanwhile, loan performance in dealer floorplan asset-backed securities is showing signs of improvement on the h...