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. 

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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.