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.