The Auto Finance Roadmap

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 use AI-based tools, the types of questions they ask, and how digital communication can be used to drive customers into the dealership, Annie Fallows, head of the bank's dealer-facing Navigator Platform, told Auto Finance News. Navigator Platform, launched in 2023, allows dealers to access information such as inventory searches and pre-qualification to provide more accurate financing offers to customers. “We made an intentional choice that we wanted to lead with being helpful versus lead with immediately trying to collect [a customer's] name and contact info,” she said. “Our dealers are able to take all that information about what's happened on the chat to pick up in store and get to that car sale that everyone is working for. This is just the beginning of the journey.” The bank is reviewing ways to improve Chat Concierge and apply it to other operations both internally and externally, Fallows said, “whether that's making our associates more effective [or] looking at additional places in the dealer process that would benefit from this type of interaction.  “We're at the beginning of a new journey, and it starts with making sure that our models and our technology are working the way that they're intended and providing high-quality interactions.” Capital One's auto originations rose 22.4% year over year in the first quarter to $9.2 billion, while the bank's auto book ticked up 5.2% YoY to $77.7 billion, according to the bank's April 22 earnings supplement. During this special episode of the “Weekly Wrap,” podcast, Auto Finance News Editor Amanda Harris and Capital One's Fallows discuss the latest trends in customer experience, dealer relations and technology. 

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 originations rose 25% YoY, while U.S. Bank's indirect loan and lease originations were down 27.3% YoY. Fifth Third Bank, PNC Financial and Truist joined several auto lenders in reporting declines in delinquencies and credit losses in Q1. Meanwhile, new-vehicle affordability hit the best level in 45 months in March but auto tariffs are expected to lead to price increases and contribute to lower sales in the coming months.  Prolonged tariffs are also projected to contribute to a decline in auto asset-backed securitization volume and increased delinquencies across securitized auto loans. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editor Aidan Bush discuss Q1 bank earnings and top trends across affordability and consumer health for the week ended April 18. 

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 far reflect strength in originations.CarMax Auto FinanceChase Auto and Wells Fargo Auto all saw year-over-year originations growth, with originations up 6%, 20.2% and 12.2%, respectively. However, ongoing economic uncertainty could affect lenders' strategies. For example, CarMax announced it will shift its long-term growth timelines due to macroeconomic concerns.Meanwhile, a proposed Senate bill could make auto loan interest tax deductible for U.S.-made cars, but some legal experts say the bill's language does not clearly define a U.S.-made vehicle.In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Associate Editor Aidan Bush discuss pre-tariff vehicle prices, credit access and earnings trends for the week ended April 11.

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 announced on April 4 that they will extend employee pricing to all consumers, while Stellantis and GM unveiled major production adjustments aimed at mitigating the expected rise in vehicle prices. The looming price hikes also spurred a sales surge in March, as consumers rushed to buy ahead of anticipated increases. As automakers react to tariffs, subprime lenders are still searching for a post-pandemic “new normal,” approaching 2025 with cautious optimism. Lenders are working to strike a balance between risk appetite and maintaining credit performance, prompting some to strategically pull back from lending to undocumented borrowers. In this episode of “Weekly Wrap,” Auto Finance News Senior Associate Editor James Van Bramer and Associate Editor Aidan Bush unpack the initial fallout from the new tariffs and preview what's ahead as the industry braces for long-term impacts. 

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 fell to its lowest level in more than two years in March, while long-term inflation expectations jumped to a 32-year high. The University of Michigan's final sentiment index dropped to 57 in March, down from 64.7 in February. Meanwhile, industry performance dipped as tariff fears set in, auto loan rejection rates crept up.  The Auto Finance Composite Index landed at 135.06 in February, down 14% year over year and 3.4% month over month. The index, factoring multiple datasets, measures whether the auto finance market is performing positively or negatively.   In this episode of “Weekly Wrap,” Auto Finance News Senior Associate Editor James Van Bramer breaks down the key takeaways from last week's tariff developments, other top stories through March 28, and what's ahead as the industry braces for the tariff impact. This episode is sponsored by Earnix.  

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 increasing for the past several years on that 60-day delinquency standpoint,” Melinda Zabritski, head of automotive financial insights at Experian, told Auto Finance News. “While it is at one of the peaks, it's unlike what we saw with the recession, where delinquency pretty much came out of nowhere. I wouldn't say anyone has been surprised with the increased levels of delinquency.” Leasing is also picking up as consumers look for lower monthly payments and EVs drive higher share. Lease share industrywide rose to 24.5% in Q4 from 22.6% a year prior, according to Experian. Indirect auto lessor Cal Automotive, for one, is expanding in Florida as lease penetration rises in tandem with high interest rates and monthly payments. Meanwhile, banks picked up market share in Q4 while credit unions scaled bank and captives continued to lead, largely driven by incentives, Zabritski said.  During this special episode of the “Weekly Wrap,” podcast, Auto Finance News Editor Amanda Harris and Experian's Zabritski discuss trends in affordability, pricing, auto tariffs, EVs and credit performance. 

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 available to originators.  Insurance companies arelarge players in backing private investment in auto, especially as lenders consider diversifying their funding sources to include asset managers alongside banks and public capital markets. Meanwhile, late-stage delinquencies rose in the fourth quarter but the pace of increase is stabilizing compared to large upticks in 2022 and 2023. As tax refund season approaches, affordability and credit access improved in February while average transaction prices saw a slight uptick.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris discusses the top takeaways from last week's funding webinar along with other top stories for the week ended March 14. 

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 trade policy sets in, with tariffs likely to raise car prices. Meanwhile, AI-driven lending platform Upstart is enhancing its auto refinance technology to enable consumers to complete the process seamlessly, without document uploads and with minimal human involvement. Agentic AI is also growing in financial services as lenders look to enhance customer experience.  Capital One is using agentic AI at dealerships to streamline car buying, allowing customers to access information, schedule test drives and compare vehicles online. The Auto Finance News team will publish a feature today detailing the use of agentic AI in the sector.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer discuss top trends including economic uncertainty and AI in auto finance for the week ended March 7. This episode is sponsored by Earnix.

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. Refinance volume is expected to pick up in 2025 as interest rates decline and lenders revamp their refi products to tap into consumer demand.  Rates and vehicle prices also will define sales and pricing trends across the automotive industry as pending tariffs are poised to raise car prices by thousands of dollars. On the EV front, possible changes to federal tax credits could impact sales even as EV prices and battery costs continue to decline. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer discuss top trends impacting vehicle sales, pricing and consumer demand for the week ended Feb. 28.  

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 macroeconomic variables, there's uncertainty with industry variables, and there's a normal volatility that exists,” he said.  In the short term, with talk of federal tax incentives being eliminated, consumers are rushing to purchase a used EV or lease a new one before the incentives are removed, Fortin said. In January, used EV sales increased 30.5% year over year, reaching 26,933 units, while the supply of used EVs tightened to 45 days' supply, down 23.3% YoY, according to a Feb. 20 report by Cox Automotive. Meanwhile, after declining in January, the Exponential Electric Vehicle Index, measuring wholesale prices of used EVs and inventory awaiting sale, landed at 91.88 as of Feb. 20, up 1.6% year to date, and 4.2% YoY.  “In the short term, you have these forces that are pushing values up,” Fortin said. “On the longer term, you have these forces that are pushing [values] down.” During this special episode of the “Weekly Wrap,” podcast, Auto Finance News Associate Editor James Van Bramer discusses used EV price volatility with Exponential Markets' Fortin.  Subscribe to “The Roadmap Podcast” on iTunes or Spotify, or download the episode.        

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 as sales rose.  Ford Credit also reported Q4 earnings last week. The captive's U.S. and Canada consumer loan and lease outstandings increased 8.4% YoY to $89.2 billion as lease volume picked up and credit losses rose. In powersports, Harley-Davidson Financial Services' originations declined 16% YoY in Q4 and provisions for credit losses rose 27% YoY. North American retail sales of Harley-Davidson motorcycles also decreased 13% YoY, while sales of LiveWire electric motorcycles fell 54% YoY.  The AIM Expo Tradeshow last week in Las Vegas highlighted stable promotional activity across the industry along with trends in technology adoption and motorcycle sales. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer discuss trends in compliance, sales, earnings and powersports for the week ended Feb. 7. 

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 changing vehicle values and inflationary pressures.  Meanwhile, looming tariffs against Canada and Mexico are expected to drive car prices higher, likely exacerbating dealers' challenges related to supply, profit margins and sales. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer discuss nationwide trends affecting the automotive industry and key updates for the week ended Jan. 31. 

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 appetite in the auto market given that they can “increase incentives not just through cash on the hood but through inverted rates, which helps out OEMs in terms of moving product,” he adds. Banks and credit unions, however, are going to “remain in a wait-and-see mode” as delinquencies in the fourth quarter continued to inch up but at a slower pace than before, Brisson says. Lenders' “wait-and-see mode” reflects industrywide uncertainty following executive orders signed by President Donald Trump on Jan. 20. One signed order focused on eliminating federal EV subsidies could hamper automakers' and consumers' willingness to invest in eco-friendly vehicles this year. Another, which is focused on trade policy, highlights Trump's plan to impose 25% tariffs on products from Canada and Mexico by Feb. 1.  Trump's hopes for added tariffs could fuel pricing instability by driving up vehicle values, adding to affordability woes and increasing automakers' production costs.  “The Trump administration's executive orders don't do anything right away, and there is nothing that was concrete put in place.” Brisson says. “However, in the minds of consumers, things have changed.” That said, there are bright spots in the market as Cox Automotive projects a year-over-year sales increase in nearly every market segment. Cox Auto projects: New-vehicle sales will increase 2.8% YoY to 16.3 million units at yearend 2025, the best year for new-vehicle sales since 2019; EV total market share will hit 10%, up from about 7.5% in 2024, making approximately one in every four vehicles sold or leased an EV in 2025; Full-year used-car sales will reach 20.1 million units, up 1.2% YoY; and CPO sales will decline 1.6% YoY to 2.5 million units in 2025. Listen to today's episode of the “Weekly Wrap,” as Auto Finance News Associate Editor Ashley Savage discusses the auto finance landscape for 2025 with Brisson. 

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' funding activity is off to a strong start in 2025 with several issuing asset-backed securitization (ABS) deals. Lendbuzz issued its first auto ABS deal of the year, joining a wave of transactions during the first two weeks.  Southern Auto Finance Co. also secured a $100 million warehouse facility with Deutsche Bank and extended its facility with Capital One.  Auto sales were strong in the fourth quarter of 2024 across the major manufacturers, and EV sales are poised to pick up in the first quarter of 2025 ahead of the presidential administration change.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer discuss the top stories and trends impacting the automotive industry for the week ended Jan. 10. 

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 grow their auto books.  Technology was core to lenders' efforts in tapping into new consumers, improving customer experience and making operations more efficient to save time.  In powersports, the market largely slowed in 2024 as high costs deterred some buyers but manufacturers and lenders looked for ways to drive sales through promotions and new financing products.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer discuss the top stories and trends of 2024.  

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 back in asset-backed lending, including auto. A higher percentage of banks are projected to tighten credit in early 2025 as consumer demand for auto financing is expected to weaken, according to a new Auto Finance News forecast. Higher prices add to affordability challenges, with the average transaction price up 1.5% year over year in November. Incentives helped boost sales and contributed to captives' lead in new-vehicle financing in the third quarter. As 2024 ends, affordability remains the prevailing challenge for consumers, dealers and lenders across the auto finance and powersports finance markets. In powersports, sales fell 5.4% YoY in November as dealers faced elevated inventory levels, higher floorplan costs and mixed demand. Meanwhile, Hyundai Capital America President and Chief Executive Marcelo Brutti was named the 2024 Auto Finance Executive of the Year. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer look back at trends in 2024 and discuss top-of-mind challenges headed into 2025. 

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 incentives, while inventory continues to build. EV sales also grew in November, with nearly every major OEM reporting YoY increases. EV financing share rose 30.7% YoY in the third quarter, making up 10.1% of total new-vehicle financing.  In powersports, Bombardier Recreational Products' North American retail sales decreased 11% YoY while product revenue also declined.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer discuss trends in vehicle pricing, EV sales and powersports finance for the week ending Dec. 6.  

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 financing. It aims to support growth as rates decline.  Meanwhile, a rise in negative equity is adding to challenges for dealers looking to sell add-on products such as maintenance plans, even while loan-to-value ratios are pushed to their limit.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer discuss top trends facing the automotive industry for the week ended Nov. 29.

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 and incentives for consumers, according to a report from automation fintech Open Lending published Nov. 15.  The increase in new-vehicle purchases reflects a slight boost in consumer confidence following the rate cuts but also highlights ongoing supply and pricing issues in the used-vehicle market, Kevin Filan, senior vice president of marketing with Open Lending, tells Auto Finance News. In this episode of the “Weekly Wrap,” Auto Finance News Associate Editor Ashley Savage discusses nonprime and near prime registrations, interest rates and refinance opportunities with Filan. Subscribe to “The Roadmap Podcast” on iTunes or Spotify, or download the episode.

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.  As of October, the average transaction price (ATP) of a new vehicle landed at $48,623, up 1.7% YoY, according to Kelley Blue Book. New-vehicle incentives climbed to 7.7% of ATP compared with 5% of ATP in October 2023. Meanwhile, auto loan demand weakened in the third quarter while banks' credit standards remained steady.  In powersports, inventory levels continued to build as sales declined 6.3% YoY in October, according to BMO Capital Markets data.  Synthetic identity fraud also is a rising concern in the powersports industry, with an uptick in fraud contributing to stolen RVs and mirroring concerns in the automotive finance industry.  In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Associate Editors James Van Bramer and Ashley Savage discuss trends in originations activity, pricing and the powersports market.  

Sales at most major automakers increased in October, driven in part by an increase in EV sales. Overall sales increased for American Honda, Ford Motor Co., Hyundai Motor America, Mazda North America and Subaru of America in October. Volvo, however, saw U.S. sales fall 17% year over year to 9,360 vehicles. American Honda's EV sales rose 31.1% YoY in October. Honda joined Hyundai Motor America and Volvo in reporting EV sales increases.  Ford Motor Co., however, saw EV sales dip 8.3% YoY while hybrid sales increased 38.5% YoY in October. BMW Group saw U.S EV sales fall 5.9% YoY to 12,311 units.  Meanwhile, AI-driven lending platform Upstart reported a 46% sequential increase in auto loan originations after it began to redesigning its platform. Upstart's auto originations totaled $26 million, down 9% YoY. Also last week, Lucid Motors posted an increase in third-quarter deliveries while production disruptions led to delivery and revenue declines for Rivian Automotive. In Powersports, Octane Lending closed a $326 million issuance in the asset-backed securitization (ABS) market on Nov. 7 as the company preps for further growth.  Last week's transaction follows Octane's $365 million ABS issuance on July 11 and aligns with the New York-based lender's goal of one ABS transaction every quarter, depending on market conditions. In this episode of the “Weekly Wrap,” Auto Finance News Associate Editors Ashley Savage and James Van Bramer discuss key takeaways from third-quarter lender and retailer earnings and the latest news on auto lease ABS issuance volume. Subscribe to “The Roadmap Podcast” on iTunes or Spotify or download the episode.  

More auto lenders announced year-over-year origination growth last week in their third-quarter earnings reports. Carvana posted a 35.5% YoY increase in originations in Q3 as retail sales jumped 34.2% YoY and 7.1% quarter over quarter to 108,651 units. The increase in originations comes as the financier and retailer saw “record performance in virtually every key financial measure,” Carvana Chief Executive Ernie Garcia said during the company's Oct. 30 earnings call.  Subprime lender Credit Acceptance Corp.'s (CACC) consumer loan assignments increased 17.7% YoY but fell 4.4% sequentially on a unit basis to 95,670, according to its Oct. 31 earnings release. CACC's consumer loan assignments rose 12.2% YoY on a dollar basis. Similarly, AutoNation Finance's year-to-date originations grew to more than $700 million in the third quarter amid efforts to reach $1 billion in total originations this year. In powersports, boat manufacturer Brunswick's boat sales sank 19.4% YoY and 20.5% sequentially to $345.3 million in the third quarter. The manufacturer's full-year retail expectations, which were adjusted in Q2, are estimated to drop by about 10% YoY, according to the earnings release. In this episode of the “Weekly Wrap,” Auto Finance News Associate Editors Ashley Savage and James Van Bramer discuss key takeaways from third-quarter lender and retailer earnings and the latest news on auto lease ABS issuance volume. 

Bank earnings last week highlighted mixed results as some institutions saw an uptick in auto originations while others' portfolios shrank.  Bank of America's auto originations rose 16.2% year over year to $7.9 billion in the third quarter, while U.S. Bank's indirect auto loan and lease originations jumped 65% YoY to $1.8 billion. Huntington Bank's auto originations rose 71.4% YoY to $2.4 billion.  Ally Financial's originations, however, declined 11.3% YoY to $9.4 billion in Q3. Other regional banks' portfolios saw slight growth in Q3, with Fifth Third Bank's auto outstandings up 3.3% YoY to $15.9 billion and PNC Financial's auto portfolio up 1.3% YoY to $15.1 billion. Truist's auto portfolio declined 11.1% YoY to $22.1 billion. Meanwhile, affordability was a resounding theme throughout Auto Finance Summit 2024 last week, with executives highlighting challenges related to rising consumer debt, slowly declining interest rates and worsening credit performance. In this episode of the “Weekly Wrap” Auto Finance News Editor Amanda Harris and Associate Editor Ashley Savage discuss key takeaways from third-quarter bank earnings and Auto Finance Summit 2024.  

Chase Auto and Wells Fargo kicked off the Q3 earnings season last week, with both lenders reporting flat or lower origination volume on a year-over-year basis. Wells Fargo's auto originations hit $4.1 billion in Q3, up 11% sequentially and unchanged compared with Q3 2023, according to the bank's earnings supplement published Oct. 11.  The bank's auto loans 30-plus days delinquent remained flat sequentially at 2.3%, down from 2.6% during the same period last year. Chase Auto, however, saw origination volume inch down quarter over quarter and YoY in the third quarter while delinquencies inched up. Chase's auto originations fell 7.7% sequentially and 2% YoY to $10 billion in Q3, though the lender maintained “strong margins and high-quality credit,” Chief Financial Officer Jeremy Barnum said on Chase's Oct. 11 earnings call. Meanwhile, Octane Lending announced last week that the company has entered the marine market, driven in part by Octane's desire to bring new technology and efficient financial solutions to the market, Mark Davidson, co-founder and chief growth officer at Octane, said on Oct. 11 at PowerSports Finance Summit 2024 in Las Vegas. In this episode of the “Weekly Wrap” Auto Finance News Associate Editors James Van Bramer and Ashley Savage discuss growth and performance trends for the week ending Oct. 11.  

High rates and rising consumer debt levels still drive a worsening auto loan landscape.  Delinquencies and losses rose across prime and nonprime securitized auto loans in Kroll Bond Rating Agency's August auto loan asset-backed securitization index published Sept. 23. Prime recovery rates increased while nonprime recoveries declined.  CarMax Auto Finance (CAF) also increased its provision for credit losses by 25.4% to $112.6 million for the fiscal second quarter of 2025, ended Aug. 31, according to the company's earnings release. CAF's finance income fell 14.4% year over year to $115.6 million, while originations ticked down 1.7% YoY to $2.2 billion.  Meanwhile, multiple auto lenders are preparing for growth in the coming year. Affinity Federal Credit Union is looking to add to its dealership base in New York, New Jersey and Pennsylvania as it steps back into leasing after a three-year hiatus.  SameDay Auto Finance is planning to double its portfolio to about $60 million within the next two years after expanding into Oklahoma and prioritizing top-performing dealerships.  Auto Finance News is also pleased to highlight nine powersports finance executives to watch in 2025 following a turbulent first half of 2024, but with optimism heading into the 2025 season.  In this episode of the “Weekly Wrap” Auto Finance News Editor Amanda Harris and Associate Editors James Van Bramer and Ashley Savage discuss growth and performance trends for the week ending Sept. 27. 

Leasing an EV or buying a used one offers a more affordable option in today's challenging market, but many consumers remain hesitant. Nearly 8.5% of new purchases were EVs, and more than 46% of those are leased, according to Experian's second-quarter state of the auto market report, published on Sept. 5. Part of the drive in EV leasing is affordability. The average payment difference between a lease and a loan across all EV models is $88 per month, according to Experian. EV lease deals often qualify for the $7,500 tax credit under the Inflation Reduction Act.  Used EV values have continued to fall and were down 11% year over year in August, according to the Exponential Used Vehicle Index, which measures price changes for wholesale electric vehicles, considering models, vehicle features and mileage.  Still, only 34% of consumers are preparing to buy an EV in the next two years, down from 48% a year ago, according to the 2024 Consumer Mobility Index from EY, which provides insights on capital markets. In this special episode of “The Roadmap,” Auto Finance News Associate Editor James Van Bramer discusses how to tap into EV leasing and declining used EV values with John Possumato, founder and chief executive of DriveitAway, and Elena Ciccotelli, founder and host of the “EVs for Everyone Podcast.”  Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 7-9 at Wynn Las Vegas. To learn more about the 2024 event and register, visit www.AutoFinanceSummit.com. 

Demand for used vehicles is strong as supply remains limited and affordability is top of mind for consumers.  The used-car turnover rate rose 8.4% year over year in August to 43 days for franchise dealers, signifying that inventory is being sold quickly.  As consumers look for more affordable cars, inflationary pressures weigh on credit performance. Auto loans 30-plus days delinquent increased 16 basis points YoY to 2.88% in the second quarter.  Credit access tightened in August, with the Dealertrack Credit Availability Index down 0.5% month over month and 1.7% YoY to 92.5.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Associate Editors Ashley Savage and James Van Bramer discuss the updates in affordability and sales for the week ending Sept. 13.  

Several companies in the automotive and powersports industries made changes to their diversity, equity and inclusion initiatives following social pressure to scale back targeted DEI strategies.  Ford Motor Co. joined Harley-Davidson, Tractor Supply, John Deere and Polaris in publicly announcing changes to their DEI programs, including in how the companies define and measure DEI at the organizations. Still, several auto lenders are maintaining their inclusion-based DEI initiatives. Meanwhile, market share data last week shows that incentives are driving up captive market share, especially on the new-vehicle side.  August sales also reflect improved hybrid vehicle sales, which contributed to a 12% month-over-month uptick and an increase of 8% year over year in total sales.  In powersports, Canadian powersports manufacturer Bombardier Recreational Products' North American retail sales declined 18% YoY in the company's second fiscal quarter driven by softer demand and increased competition with incentives.  In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Associate Editors Ashley Savage and James Van Bramer discuss the latest feature and an update on vehicle sales for the week ending Sept. 6.  

Regulators are scrutinizing practices surrounding the use of artificial intelligence and machine learning as well as aftermarket product sales, prompting auto lenders to review processes for themselves and their dealer partners.  The Consumer Financial Protection Bureau this month published a letter to the U.S. Treasury making it clear that emerging AI-based technology isn't exempt from long-standing consumer protection laws. Lenders must test and monitor the use of new technology and tools and ensure that they convey accurate information to consumers.  At the same time, the CFPB's funding is under scrutiny again, as new arguments question whether the bureau should receive money when the Federal Reserve isn't profitable. Under the Dodd-Frank Act, “the combined earnings of the Federal Reserve System” are supposed to fund the CFPB.   In powersports, inventory continues to be a challenge across every market segment, spawning elevated promotions to drive sales and operational changes to meet changing consumer demand.  In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Associate Editors Ashley Savage and Jameso Van Bramer discuss top trends in compliance, technology and powersports for the week ended Aug. 23. 

Subprime lenders are weighing the risks and benefits of protecting assets through force-placed insurance as credit-challenged borrowers face continued affordability issues, while some lenders tap into “buy here, pay here” opportunities, in this episode of the Weekly Wrap. 

In this episode of the “Weekly Wrap,” Auto Finance News Associate Editors Ashley Savage and James Van Bramer discuss trends in financier earnings, AI-based lending updates, finance and insurance revenue and the powersports market for the week ended Aug. 9.  

In this episode of the “Weekly Wrap,” Auto Finance News Associate Editors Ashley Savage and James Van Bramer discuss trends in financier earnings, technology, EVs and the powersports market for the week ending Aug. 2.   

Captives' second-quarter earnings last week reflected portfolio growth despite affordability and incentive challenges. Leases are a key driver for dealers as consumers continue to be hesitant amid inflationary pressures, high interest rates and elevated vehicle prices. In powersports, Harley-Davidson Financial Services' originations ticked down 4% year over year in Q2 and retail finance receivables were flat YoY at $7 billion. 

Second-quarter bank earnings continue to point to mixed loan production volume and a rise in leasing spurred by EVs. U.S. Bank originated $1.9 billion in Q2, up 21.5% year over year while outstandings fell 30.6% YoY to $8 billion. PNC Financial's auto outstandings dipped 1.6% YoY to $14.8 billion, and Citizens' auto book continued to run off. Ally Financial originated $639 million in battery EV and hybrid leases during Q2.

Second-quarter bank earnings kicked off this week and showed a continued slowdown in auto originations compared with a year ago. Chase Auto's originations declined 10% year over year to $10.8 billion and Wells Fargo Auto's originations decreased 22.9% YoY to $3.7 billion. Powersports sales slowed in June. 

June marked mixed vehicle sales and an uptick in incentives ahead of the July Fourth holiday, while the industry continues to keep an eye on impacts from cyberattacks that halted dealer operations.  

Higher costs for everyday expenses such as gas, groceries and vehicle insurance have prompted many consumers to turn to credit cards, with rising expenses making it harder for consumers buried in debt to qualify for auto loans.

Point-of-sale financing as an alternative payment method is a growing opportunity for lenders, technology company Pagaya's President Sanjiv Das says on this episode of “The Buzz” podcast, shared to The Roadmap. According to auto lender and Pagaya partner Ally Financial, POS financing is expected to reach a value of more than $81 billion by 2030.

Car dealerships are leaning on manual processes following consecutive cyberattacks against software provider CDK Global last week. In powersports, RV and marine manufacturer Winnebago Industries' promotional liabilities decreased 26.4% year over year as demand for RVs was sluggish during Q3.

The auto finance industry is showing slight improvements in affordability and loan production while worsening credit performance and inflationary pressures remain concerns. Auto outstandings held steady above $1.5 trillion in the first quarter, down 0.2% sequentially but up 2.4% year over year. Access to auto credit worsened for the second month in a row but improved YoY in May.

Leasing is picking up in tandem with incentives while used-vehicle values decreased in May — positive signs toward improving affordability.  While some measures indicate better deals and lower prices, external costs such as vehicle insurance continue to burden borrowers, especially affecting consumers with lower credit scores.

Auto lenders were active in the capital markets last month as credit union issuance picked up, while market share among banks and credit unions shifted in the first quarter. In powersports, Canadian manufacturer Bombardier Recreational Products' North American retail sales fell 5% year over year. Motorhome values, too, fell 9.4% YoY in April while towables values declined 7.2% YoY. Recreational vehicle values increased sequentially, in line with seasonal demand. 

Optimizing efficiency, improving accuracy and customer experience, and automating credit decisions are core uses of artificial intelligence in the auto finance industry as lenders look to grow their portfolios and manage risk.  

Several auto lenders had to adjust their underwriting strategies in 2023 to account for worsening credit performance across loans originated in 2021 and 2022, a theme prevalent during Auto Finance Summit East 2024. 

Gaining operational efficiencies through artificial intelligence, navigating a challenging EV market and embracing the return of leasing were top themes at Auto Finance Summit East 2024 last week in Nashville.  

First-quarter earnings continued to bring mixed results as vehicle sales slowed in April.  

First-quarter earnings kicked off last week with banks reporting a decline in auto originations. Chase Auto and Wells Fargo Auto's origination volume decreased year over year in Q1, while outstandings were mixed.Meanwhile, auto credit availability improved across all lender types in March.

Used-vehicle values declined again in March while car sales improved as the industry shifts toward a buyers' market. 

The return of higher supply levels is contributing to an uptick in incentives and increased new-vehicle sales projections. Meanwhile, the powersports market is feeling the ramifications of higher interest rates. 

Auto lenders have been active in the past week in funding initiatives, while competition has ramped up across the market.