The Auto Finance Roadmap

While credit access improved in May and vehicle prices were steady, affordability remained a concern, especially for credit-challenged consumers who face multiple forms of debt.  The Dealertrack Credit Availability Index increased 2% year over year in May to 96.7 as credit unions and banks loosened standards and approval rates improved. At the same time, the average new-vehicle transaction price t...

Amid increased vehicle values, a rise in vehicle repossessions and continued tariff-induced uncertainty, Auto and powersports players are implementing new leadership, positioning themselves for growth and weighing incentives to weather macroeconomic challenges.  Prices for every major vehicle segment except compact cars saw a year-over-year increase in May, according to Cox Automotive data publish...

Major players in the auto and powersports industries continue to adapt to the rapidly changing macroeconomic environment teeming with the effects of tariffs and rising inflation. Where some see opportunity, others see indications of a challenging fiscal year.   As consumers continue to grapple with affordability, which has been further pressured by tariffs, auto refinancers see an opportunity as d...

Uncertainty defined much of the conversation at Auto Finance Summit East 2025 last week in Nashville, Tenn., with auto lenders highlighting affordability, auto tariffs, EV dynamics and technology as top-of-mind considerations headed into the rest of the year.   Auto tariffs were a resounding theme throughout the event, as lenders discussed inventory and pricing dynamics, mixed consumer demand and...

Powersports lender Synchrony is working closely with dealerships to align financing options with consumer appetite and sales goals.  West Palm Beach, Fla.-based Broward Motorsports of Palm Beach, for one, benefits from offering low-rate financing options through financiers such as Synchrony, Alex Reyes, sales manager at the motorcycle dealership, told Auto Finance News. He said the Synchrony Outdo...

Capital One is looking at ways to expand the use of AI-based agents on the heels of launching its agentic AI-based tool, Chat Concierge, earlier this year. Chat Concierge answers customer queries and can help with tasks such as comparing available vehicles and exploring financing options online before consumers head to a dealership.   In building its tech stack, Capital One reviewed how consumers...

First-quarter bank earnings highlighted mixed results as some banks saw an uptick in originations and leasing volume, while credit performance largely improved.   Ally Financial’s auto originations increased 4.1% year over year as lease originations were up 28.6% YoY. The bank’s retail auto delinquencies declined 9 basis points (bps) YoY to 3.79%.  Across the regional banks, Huntington Bank’s auto...

Credit access improved and vehicle prices were steady in March before tariffs took effect, while the first wave of first-quarter earnings point to growth for auto lenders. Auto loan approval rates and subprime share increased in March, contributing to improved credit access. Increased demand ahead of the tariff-induced price hikes led to a surge in vehicle sales in March, while Q1 bank earnings so...

The auto industry is rapidly responding to tariffs that took effect last week, while subprime lenders continue to navigate risk and credit performance.  Shares of the three major U.S. automakers — Ford, General Motors, and Stellantis — fell sharply at market close on April 3, dropping 5.9%, 4.3%, and 9.4%, respectively, as the tariffs officially took hold.  In response, Ford and Stellantis announc...

The auto industry is bracing for impact as tariffs on vehicles take effect April 3.  Auto stocks slumped on March 26 after confirmation that the tariffs will take effect as planned. The Big Wheels Stock Index fell 2.8% by market close, marking a sharp drop that has continued as the tariff deadline approaches.   That market dip comes alongside fresh signs of consumer unease. U.S. consumer sentiment...

The fourth quarter highlighted still-elevated auto delinquencies, growing lease share and competitive market conditions.   Credit performance worsened in Q4, with 60-day delinquencies up 4 basis points year over year to 1.16% of auto loan balances, according to Experian. However, the rate of increase for past-due balances has slowed compared with a year ago and in 2022.  “We've been steadily incre...

Diversification across public and private funding sources is key to driving origination growth for auto lenders as the cost of funds fluctuates and investors look to put an abundance of capital to work in auto finance.   Auto Finance News’ March 11 webinar “Funding Strategies: From Warehousing to Private to ABS” shed light on interest from private investors in auto and the amount of money that is...

Tariff uncertainty continues to disrupt the auto industry; companies increasingly rely on AI for innovation and efficiency.  The auto industry has prepared for an "adjustment period" as 25% tariffs on Canada and Mexico were set to take effect on March 4. President Donald Trump announced a one-month delay the next day.  The Federal Reserve’s latest Beige Book showed signs of worry   as uncertainty...

The first half of 2025 is expected to bring stabilizing delinquencies, increased demand for automotive refinance and mixed vehicle price and sales dynamics.  Auto loan delinquencies are projected to cool in the second quarter as the market stabilizes, improving lenders’ appetite for auto credit. Auto originations are also expected to increase between 12% to 20% as tax refunds boost consumer demand...

Used EV values have fluctuated amid uncertainty over tax credits and potential tariffs.  “For the used EV market, if you want to describe it in one word right now, it's ‘volatile,’” Paul Fortin , co-founder and head of automotive products at Exponential Markets , told Auto Finance News .  “The reason it's volatile is that the overall -car market right now is also volatile. There's uncertainty with...

The Department of Government Efficiency, run by Elon Musk, effectively shut down the Consumer Financial Protection Bureau over the weekend, adding to uncertainty regarding operations after CFPB Director Rohit Chopra was fired last week.   Auto retailers Asbury Automotive and Group 1 Automotive in the fourth quarter reported a double-digital year-over-year increase in finance and insurance revenue...

Auto lenders are keeping an eye on loan production, credit performance and vehicle prices as tariffs loom.  Subprime lender Credit Acceptance Corp.’s originations ticked up 0.3% year over year in the fourth quarter to 78,911 loan assignments as the financier grew its number of active dealers.   Negative equity and rising delinquencies continue to be a concern for auto lenders as consumers navigate...

Captive lenders will remain aggressive in the auto space this year after tapping back into auto loans at the close of 2024, when delinquencies cooled.  “Delinquency rates for captives have come down and they are improving,” Michael Brisson , director of economic research at Moody’s Analytics, tells Auto Finance News in today’s “Weekly Wrap” podcast.   Captives will likely maintain increased appeti...

Wildfires impacting large areas of California are contributing to higher auto insurance costs in the state and more deferral offerings from lenders for affected borrowers.   The annual cost of full-coverage car insurance in California rose 47.8% year over year in December to $2,575, compare with the average cost across the U.S. of $2,313. The current fires started Jan. 7.   Meanwhile, lenders’ fun...

The past year has largely been defined by persistent affordability concerns even as vehicle prices stabilize and interest rates come down, as costs for everyday expenses make it challenging for consumers to keep current on debt.   The most-read stories of 2024 highlight readers’ interest in how financial institutions navigated affordability challenges and managed risk while looking to maintain or...

Bank pullback in asset-backed lending has spurred growth for lenders that provide floorplan financing for independent dealers, while banks are expected to further tighten credit access in 2025 as demand weakens.  Floorplan providers First Business Bank and NextGear Capital have seen a boost in their portfolios as dealers use more of their floorplan lines of credit for inventory and banks scale bac...

The Manheim Used-Vehicle Value Index ticked up 0.2% YoY and 1.3% month over month in November to 205.4.   High car prices have contributed to affordability pressures for consumers, but incentives are helping drive sales. The latest edition of the Beige Book, citing data collected on or before Nov. 22 by the Federal Reserve, highlights areas of the country where sales activity has rebounded with in...

Affordability, credit performance, leasing and digital innovation have been top of mind for auto lenders in 2024.   Car shoppers saw some relief over the holiday weekend as Black Friday deals offered low interest rates and cash-back incentives.   Lenders are also focused on sustainable growth. U.S. Bank is investing in digital capabilities across auto, recreational vehicle and marine product finan...

Near prime and nonprime consumers are seeing some relief from affordability challenges in the automotive industry following rate cuts by the Federal Reserve but remain cautious about elevated monthly payments.  New-vehicle registrations among near prime and nonprime consumers increased 1% year over year and 7% month over month to 161,435 in the second quarter, highlighting an increase in supply an...

Auto originations have picked up industrywide even as average payments remain elevated, while manufacturers are increasing incentives to move inventory.   Originations totaled 6.4 million contracts in the second quarter, up 0.7% year over year, according to the latest data from TransUnion. The return of leasing and an uptick in incentives are helping address affordability concerns and drive sales....