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.