The auto asset-backed securitization market remains resilient as a funding outlet for many issuers and originators. 

“It's an important source of capital for us,” Michael Gustafson, chief financial officer at lender Arivo Acceptance, tells Auto Finance News. “The primary driver for us is getting critical mass and building up the portfolio to drive the right economics in securitization."

West Valley City, Utah-based Arivo in July closed a $221 million transaction backed by nonprime and subprime auto loans, marking its first ABS deal of 2026 and seventh overall. The company had penciled in an ABS deal for late Q2, largely as a function of originations growth and freeing up capacity in its warehouse lines, Gustafson says. 

Investors appear to be more selective compared with 2025 amid headwinds including consumer affordability, interest rates, inflation concerns and geopolitical uncertainty, he notes.  

“That said, we saw robust demand across the capital stack,” Gustafson says, noting that new investors joined Arivo's order book for the latest deal. 

Arivo expects to be in the market a couple of times a year as it looks to expand its footprint and grow its portfolio. The lender historically has come to market one to two times per year. 

“The more often we're coming to market, we become even less sensitive to the timing. ... You're able to absorb some of the market volatility more easily because you're repricing more frequently,” Gustafson says.

Credit characteristics of Arivo's latest pool were in line with its previous issuance in July 2025, according to a July 20 Morningstar DBRS presale report: 

• The number of loans in the pool was 6,782, compared with 7,331; 
• The annual percentage rate was 19.6%, up from 19.32%; 
• The original term was 72.19 months, up from 71.86 months; 
• The loan-to-value ratio was 125.9%, up from 122.98%;  
• The share of loans with no FICO was 5.5%, down from 6.14%.

In this podcast episode, Auto Finance News Associate Editor C.J. Moore and Gustafson discuss Arivo's latest auto ABS deal, its tie in with Ken Garff Automotive Group, subprime consumer health, funding costs and more.

Ally Financial, Capital One and Huntington Bank posted mixed results in the second quarter for auto originations and credit performance.  

Ally Financial’s auto originations rose 20.9% year over year in Q2 to $13.3 billion, while Capital One's auto originations increased 18.9% YoY to $12.9 billion. Huntington Bank's auto originations, however, decreased 39.1% YoY to $1.4 billion.  

Delinquencies were also mixed, with the rate of auto loans 30-plus days past due down YoY at Ally and Capital One but up at Huntington. The auto net charge-off rate rose YoY at Capital One and Huntington but declined at Ally.  

Tesla, meanwhile, produced 451,758 cars, up 10.1% YoY, in Q2 and delivered 480,126, up 25% YoY. The EV manufacturer's lease penetration decreased to 1.6% in Q2 from 1.7% a year prior but was up from 1% in Q1.  

Leasing continues to help consumers access lower monthly payments. AmeriTrust Financial this month launched a program with direct car-buying company Military AutoSource to provide new- and used-vehicle leasing for military service members.  

In funding news, Pagaya Technologies issued its largest auto asset-backed securitization deal at $750 million as the fintech continues to see strong investor interest and auto volume.  

In powersports, industrywide boat sales increased 3.6% YoY to 5,292 units in June. Retailer MarineMax reported a 2.1% YoY dip in finance and insurance product revenue in its fiscal third quarter alongside a 7.1% YoY decline in same-store sales. 

Harley-Davidson Financial Services' originations also increased 10% YoY in Q2 to $940 million while motorcycle sales increased 3% YoY to 29,751 units in North America. 

In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Aidan Bush and Associate Editor C.J. Moore discuss second-quarter trends across sales, finance and insurance revenue, powersports and funding. 

National and regional bank second-quarter earnings point to mixed performance as larger banks lean into auto production while regional banks held steady or scaled back amid market volatility.  

Wells Fargo Auto, for one, reported a 40.6% year-over-year increase in originations in Q2, while Chase Auto's originations rose 8.9% YoY. Bank of America's auto book shrank. 

Regional banks saw improvement in auto portfolio delinquencies, but portfolio growth was mixed. Fifth Third Bank's 30- to 89-day delinquencies across its indirect secured consumer portfolio, made up of 84% auto loans, fell 11 basis points (bps) YoY, though net charge-offs inched up 3 bps YoY. 

U.S. Bank's indirect loan and lease originations, which include auto, increased 61.2% YoY, while PNC Financial's auto portfolio ticked down 0.1% YoY. Truist reduced lending in prime and nonprime auto and discontinued originations and RV and marine loans.  

Buy here, pay here dealer America’s Car-Mart's net charge-offs also rose as sales declined 27.1% YoY and the company eyes restructuring and financial challenges. The Rogers, Ark.-based retailer cut its number of dealerships by 60 locations, or 39%, YoY to 94. 

In powersports, EV manufacturer Lightship is rolling out consumer financing options for its electric-assist RV trailer. 

In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Aidan Bush and Associate Editor C.J. Moore discuss second-quarter trends across credit performance, portfolio growth, originations, sales and funding. 

Subaru Motors Finance plans to expand its underwriting to attract more first-time buyers, Managing Director Michael Cottone tells Auto Finance News in the latest episode of “The Auto Finance Roadmap Podcast.”

“We are extremely low when it comes to delinquencies; the FICO scores are very high, the income levels are high,” he says. “We’re looking to try and find more buyers for the Subaru brand. We’re trying to look at where we can expand credit policies … especially looking at the younger demographic.”

Cottone pointed to Subaru’s college graduate financing program, which, according to Subaru, approves new-vehicle loans for recent graduates with thin or invisible credit files as long as:

• The graduate’s payment-to-income ratio does not exceed 15% of gross monthly income;
• They have not faced bankruptcy, foreclosure or repossession; and
• They have proof of employment and income.

The program also offers up to $500 in cash rebates, according to the retailer.

As a private-label captive for Subaru of America powered by Chase Auto, Subaru Motors Finance uses Chase’s digital platforms and in-person events to market Subaru financing offers, Cottone says.

“We’re trying to find all the different avenues from JPMorgan Chase to get those first-time buyers into a Subaru. … It’s really a matter of generating more traffic, more conquesting and more customers to come into the doors so the retailers can sell to them,” he says.

The captive is also leaning on Subaru of America’s lease incentives to offer borrowers lower monthly payments rather than financing longer terms, Cottone says.

Cottone says Subaru Motors Finance’s originations rose year over year as of July 7, without providing specifics. Subaru of America’s auto sales jumped 18.1% YoY in June to 54,909 units.

In this episode of “The Roadmap,” Auto Finance News senior associate editor Aidan Bush and Cottone discuss consumer affordability challenges, leasing, longer loan terms, EV financing and technology adoption.

BMW Financial Services’ lease penetration has normalized following the elimination of the federal electric vehicle tax credit, says Ole Jensen, chief executive and president of the captive in North America.  

“We [have] slightly higher penetration when it comes to [battery EVs] in terms of leasing, because a lot of people [are] maybe uncertain about if they like the car, if they like the technology. They want to have the option of returning the car,” he says, adding that battery life concerns remain even as 3-year-old EVs come back to the manufacturer with 95% of battery life remaining. 

The captive’s finance penetration sits at about 50% lease and 50% loan, Jensen says during a special episode of “The Roadmap Podcast.”  

“I would predict that we see a further normalization ... because you will always have people who want to lease [and] you always have people who want to own the car,” he says.  

Globally, the share of new BMW Group vehicles leased or financed through its financial services segment rose to 51.6% in the first quarter compared with 43% a year prior, according to the OEM’s quarterly statement published May 6. 

Leasing penetration also varies regionally, Jensen says.  

“We see very high lease shares on the East and on the West Coast, naturally,” he says. “Since the West Coast is so dominant in the BEV market still, with a higher leasing, that might be also driving currently our higher leasing penetration on BEV.” 

Despite lease volume normalizing, BMW Financial Services, along with parent company BMW Group, are investing in EVs. In fact, the manufacturer recently completed an expansion of its Plant Spartanburg in Greer, S.C., where it will assemble the next-generation BMW X5 line, which includes fully electric and hydrogen-powered versions. 

BMW Financial Services was the 12th-largest auto lender by outstandings at yearend 2025 with a portfolio of $43.1 billion, according to the latest Big Wheels ranking data. 

In this episode of “The Roadmap,” Auto Finance News editor Amanda Harris and Jensen discuss the electric vehicle landscape along with affordability, ancillary product demand, floorplan financing trends and technology investments. 

Car buyers are facing a tough market as rising insurance costs add to vehicle ownership expenses and lenders are mindful of high loan-to-value ratios.  

The national six-month auto insurance premium rose 7.5% year over year to $1,163 in May, with the average up 20.6% YoY to $1,263 in the first quarter. Individual borrowers’ insurance premiums are difficult for auto lenders to track, creating a challenge as insurance payments take up a larger portion of consumers’ budgets.  

Amid high insurance and vehicle costs, first-time car buyers are navigating challenges in securing financing as lenders are cautious regarding high loan-to-value ratios and limited credit history.  

Affordability was also a leading topic among dealers at the recent National Independent Automobile Dealer Association Convention and Expo. Independent dealers are aligning inventory with what consumers can buy.  

Meanwhile, the capital markets remain active despite cost volatility. Nonprime indirect auto lender Arra Finance closed its first asset-backed securitization and PenFed Credit Union issued its first auto ABS deal of 2026 this month. 

In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez, Senior Associate Editor Aidan Bush and Associate Editor C.J. Moore discuss top trends across affordability, vehicle sales, dealer activity and funding. 

Auto retailers are gaining momentum on the heels of increased sales and finance volume even as the industry navigates continued affordability headwinds.  

Carvana last week opened its first test-drive center in Dallas after acquiring seven Stellantis dealerships to expand into new-car sales.  

The Tempe, Ariz.-based retailer sells new and used vehicles online and reported a 40% year-over-year increase in retail sales in the first quarter to 187,393 units.  

Retailer CarMax also reported a 3.3% YoY uptick in combined retail and wholesale used-vehicle sales in Q1, while CarMax Auto Finance’s originations rose 5.5% YoY to $2.4 billion.  

From an affordability perspective, interest rates on new- and used-vehicle loans declined by mid-June. The national average interest rate on a 60-month loan for a new car decreased 97 basis points YoY to 6.74% as of June 15, according to Curinos.  

With lower rates and longer-term loans, consumers are opting to refinance their auto loans for lower monthly payments.  

Lenders also are adding more longer-term loans into asset-backed securitization deals as 72-plus-month terms gain traction. At the same time, auto financiers are keeping a close eye on funding costs and loan performance.  

Meanwhile, powersports companies have been active with capital funding ventures this month. Octane sold a $340 million portfolio of powersports and outdoor power equipment loans to Bayview Asset Management, while California-based electric RV startup Evotrex raised $30 million in series A financing.  

In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Aidan Bush and Associate Editor C.J. Moore discuss top trends across sales, affordability, funding and powersports.  

Carvana has lowered its interest rates as its profitability, sales and finance volume improve. 

The Tempe, Ariz.-based retailer in the past year has focused on expanding inventory to meet consumers’ needs as car prices rise, improving customer experience and using AI to streamline transactions, Matt Dundas, vice president of finance, tells Auto Finance News during a special episode of “The Roadmap” podcast.  

The efforts, he says, are in line with the retailer’s goal to sell 3 million units per year in the next five to 10 years at a 13.5% adjusted EBITDA margin.  

“On that profitability piece, we're relatively close to that midterm goal that we've set for that four-to nine-year horizon,” he says. “That's allowed us, as we continue to make fundamental gains across both finance and the rest of the business, to return some of that back to consumers to drive more value in the Carvana platform.” 

The retailer reduced interest rates by about 100 basis points in the fourth quarter, Chief Executive Ernie Garcia said on the company’s earnings call in February. Rate cuts have contributed to improved financing penetration, Dundas said. 

“About four out of five customers historically have financed with Carvana,” he said. “We’ve seen that ratio start to improve over the last year as we get more competitive with our rates.” 

As of the first quarter, Carvana’s originations totaled $4.3 billion, up 59.3% YoY . Sales climbed 40% YoY to 187,393 units in Q1. Carvana’s portfolio also rose 38.5% YoY to $22.4 billion at yearend 2025, according to the latest Big Wheels ranking data. 

“As Carvana grows, we grow as the lending business,” Dundas says on the podcast. 

In this episode of “The Roadmap,” Auto Finance News Editor Amanda Harris and Dundas dive into the retailer’s growth and innovation strategy in 2025 and the rest of 2026. 

AI-powered research tools are changing how consumers shop for powersports vehicles, prompting dealers to spend more time explaining financing options and correcting misconceptions about rates, promotions and pricing. 

Consumers are increasingly arriving at dealerships with information gathered from online searches and AI platforms, creating both opportunities and challenges for finance managers, Fun Bike Center Motorsports Finance Manager Samer Fidy tells Auto Finance News during an episode of “The Roadmap” podcast. 

“They’re coming to confirm the research that they’ve done online,” he says. 

At the same time, affordability remains a key factor in powersports financing decisions, with about 80% of the Lakeland, Fla., dealership’s customers focused on monthly payments as they evaluate motorcycles, personal watercraft and side-by-sides, Fidy says. 

AI-driven shopping behavior 

The preparation consumers are doing is leading finance teams to engage earlier in the buying process, Fidy says. 

“The monthly payment is key [to] us closing the deal,” he says. 

While AI tools can help shoppers gather information quickly, they can also create confusion when consumers encounter financing offers, rates or promotions that do not apply to a specific brand, vehicle or lender, Fidy says. 

Affordability and financing options 

At the same time, longer loan terms, including 72- and 84-month financing options, continue to increase in powersports financing, particularly for higher-priced units such as personal watercraft, side-by-sides and premium motorcycles, Fidy says. 

Dealers now need to spend more time educating first-time buyers about credit, interest rates and financing structures, especially when a powersports purchase represents their first independent financing experience, he added. 

As AI adoption grows and consumers keep researching before entering a showroom, education is becoming a larger part of the sales and financing process, Fidy says. 

“I think this will be the new norm,” he says. “That’s why it’s important to educate your team on the importance of the dealership.” 

Used-car financing gained ground in the first quarter as affordability pressures continued to push consumers away from higher-priced new vehicles. 

Used vehicles accounted for 58.6% of all auto financing in Q1, up from 58.2% a year earlier and marking the first Q1 increase since 2023, according to Experian.  

The shift underscores a broader affordability challenge facing the auto industry as average used-vehicle loan amounts rose 3% YoY to $27,070, while average monthly payments increased 1.5% YoY to $531. 

New vehicles remained considerably more expensive, with average loan amounts hitting $43,925 and monthly payments climbing 2.9% YoY to $770. 

As consumers look for lower-cost options, lenders also are expanding credit access, with nonprime borrowers accounting for 31.6% of all auto loans in Q1.  

Growth remained a key theme for lenders, including AutoNation Finance, Global Lending Services, Stellantis Financial Services and Lendbuzz, which were among the fastest-growing auto lenders by outstandings in 2025, according to the latest Big Wheels Rankings. 

Auto ABS, AI and compliance take center stage 

Meanwhile, funding markets were active, with U.S. auto asset-backed securities issuance at $79.3 billion year to date through May 29, up 3.9% YoY, according to JPMorgan Securities.  

In addition, the FTC disclosed the names of 97 dealership groups that received warning letters concerning potentially deceptive vehicle pricing practices, reinforcing the agency’s focus on transparency and compliance.  

In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez II and Senior Associate Editor Aidan Bush discuss top trends across macroeconomic dynamics, affordability, funding and powersports lending for the week ended May 29.