The Auto Finance Roadmap

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. 

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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.