The Auto Finance Roadmap

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...

New identification requirements for vehicle registrations in Texas have prompted concerns from dealers and lenders about a potential increase in unregistered or uninsured cars on the road.  The Texas Department of Motor Vehicles in a Nov. 19 bulletin clarified that documentation required to register vehicles or renew registrations cannot include expired IDs and that passports issued by a foreign c...

Electric vehicle sales declined at most major manufacturers in November on the heels of an uptick in EV share of total new-car sales in the third quarter, due in large part to a pull-ahead of purchases before the federal EV tax credit expired.   Automakers including American Honda, Ford Motor, Hyundai, Subaru and Toyota reported double-digit year over year declines in EV sales during the month, wh...

Bankrupt subprime retailer Tricolor’s 10,000 remaining vehicles may be sold by March 2026 if trustee Anne Burns’ motion is approved. Tricolor backup servicer Vervent and vehicle management company Holman will sell all remaining vehicles, if the motion is approved by Judge Michelle Larson. This includes vehicles that may belong to Tricolor’s creditors, through third-party auctioneers, according to...

Last week brought more shakeups in the auto finance industry as lender Flagship Credit Acceptance announced it was finalizing a sale of the company to an investment firm, while Prestige Financial Services stopped originations.   Chadds Ford, Pa.-based Flagship announced on Nov. 21 that it had entered into an agreement to sell the business to New York-based InterVest and would be rebranded to Flags...

The compliance industry continues to face headwinds as funding for the Consumer Financial Protection Bureau is in jeopardy after the Department of Justice recently ruled that the bureau cannot request money from the Federal Reserve .  The DOJ’s Nov. 7 ruling states that the “combine earnings of the Federal Reserve system” — laid out by the Dodd-Frank Act as the source of most of the CFPB’s funding...

Auto retailers and fintechs mostly reported growth in the third quarter amid mixed October retail sales, flat vehicle values and some layoffs.  CarMax named David McCreight as its interim president and CEO, replacing Bill Nash, effective Dec. 1. Nash is not retiring, and the shakeup comes as the Richmond, Va.-based retailer’s comparable store used-vehicle retail sales are expected to drop between...

Auto lenders are homing in on key areas of underwriting to manage risk and grow in 2026 as the subprime market continues to face challenges with credit performance and affordability. Improved loan decisioning, declining interest rates, the use of data and analytics, and responsible growth are top of mind for auto lenders into next year, leaders said at the recent Auto Finance Summit 2025. The Fede...

Investors are seeking more transparency following Tricolor’s Chapter 7 bankruptcy filing last month, which has also prompted several auto lenders to review their books and assure investors of loan quality and operational health.   The auto finance industry and asset-backed securitization issuers could benefit from more transparency and consistency in disclosure policies, panelists said during a se...

Auto Finance Summit 2025 shed light on how auto lenders are responding to challenges facing the wider market, including credit performance, affordability and evolving technologies.  Following subprime buy here, pay here lender Tricolor’s Sept. 10 Chapter 7 bankruptcy filing, auto asset-backed securities spreads widened, Kayvan Darouian, director of consumer asset-backed securities research at Deut...

The powersports industry continues to grapple with volatile market conditions including rising prices, falling sales, waning consumer demand and a rapidly changing compliance landscape, but there are some lenders and dealers who have proven themselves resilient.   Auto Finance News today announced 11 powersports executives to watch heading into 2026 who have thus far proven their ability to suppor...

A federal investigation into subprime auto lender Tricolor Holdings was confirmed as court proceedings began last week.   In a court hearing on Oct. 3, Tricolor’s lawyers confirmed that federal law enforcement and regulatory agencies are investigating the buy here, pay here dealer and subprime lender for alleged misconduct and alleged systemic fraud.  Since Texas-based Tricolor’s Chapter’s 7 bankr...

Powersports dealers are working closely with manufacturers to balance supply with a decline in sales and worsened consumer confidence, themes that were prevalent during Powersports Finance Summit 2025, held Sept. 23-24 in Columbus, Ohio. Lender Octane, for one, is working to provide the technology and finance programs needed to support dealerships as they face smaller margins compression and lower...

As the Department of Justice investigates the alleged fraudulent claims against Tricolor Auto Acceptance , one expert warns that there may not be enough collateral to satisfy the subprime lender’s outstanding debt with all its financiers.  In more common bankruptcy scenarios, assets are liquidated to repay outstanding debt.   “What makes it a little bit more complicated [with Tricolor] is there's...

Tricolor Auto Acceptance’s chapter 7 bankruptcy filing on Sept. 10 has led to ratings downgrades for the financier and talks of potentially wider implications for the buy here, pay here and subprime markets.   The Texas-based buy here, pay here retailer and lender closed its dealerships in tandem with its filing for liquidation.   Since then, ratings agencies Kroll Bond Ratings Agency, Moody’s Rat...

Buy here, pay here dealership Oak Motors is slowing approval of credit applications as long-term affordability concerns persists and despite increased volume.   Anderson, Ind.-based Oak Motors’ applications were up 30% year over year at the beginning of September, according to data the dealership group provided to Auto Finance News . The dealership group did not specify the number of applications....

As fraudulent activity picks up across the automotive industry, floorplan financiers are also seeing an uptick in dealers disappearing with vehicles or submitting false documents.   Floorplan lenders such as NextGear Capital and Westlake Flooring Services in recent months saw a rise in the volume of fraud and more dealers defaulting on their lines of credit.   Supporting dealers is a top priority...

Nonbank auto lenders may soon have a reason to celebrate, following a proposed rule change by the Consumer Financial Protection Bureau to how it defines larger participants of the auto market.  On Aug. 7, the bureau filed an advanced notice of proposed rulemaking to change the definition of a larger participant in auto to nonbank entities with up to 1.1 million aggregate annual originations, an in...