The Auto Finance Roadmap

Nonbank auto lenders may soon have a reason to celebrate, following a proposed rule change by the Consumer Financial Protection Bureau to how it defines larger participants of the auto market. On Aug. 7, the bureau filed an advanced notice of proposed rulemaking to change the definition of a larger participant in auto to nonbank entities with up to 1.1 million aggregate annual originations, an increase from 10,000. This followed the CFPB’s July 14 motion filed with the Office of Management and Budget which would rule on the request. The change, if approved, would reduce the number of financiers considered larger participants to five from 63, according to the notice. Traditional lenders and nonbank entities would still be subject to state laws even if they are no longer under CFPB jurisdiction.  While this unfolds, lenders are also working to seize opportunities in the market.  Auto lenders are continuing to lean into refinance programs on the heels of stabilizing interest rates and consumers’ search for affordability and better loan terms. Subprime lender Arivo Acceptance Chief Executive Landon Starr told Auto Finance News that the company is ramping up its refinance program with a goal of $60 million in average monthly origination volume. In fact, TransUnion estimates 18 million consumers, or 23% of borrowers with open auto loans, have interest rates that exceed the average APR in the industry.  Also, average vehicle transaction prices jumped 5.2% year over year in the second quarter to $31,216, according to an Edmunds report published Aug. 12. In this episode of the “Weekly Wrap,” Auto Finance News Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends across second-quarter bank earnings for the week ended Aug. 15.  

Amid sustained inflation, more high-tech vehicles in the market and tariff-induced uncertainty, aftermarket repair costs are steadily climbing.Vehicle repair costs are up 43% since 2019 to an average of up to $1,700 per visit, according to data provided to Auto Finance News by lender Synchrony Financial.Three factors contributed to the rise, Keith Mait, automotive, oil and gas business leader for Synchrony, told AFN:Vehicles are more complex with more expensive technology;Customers keep their vehicles longer; andRepair shops struggle to find talent.With longer ownership of vehicles, more repairs are inevitable, he said. While customers are willing to get emergency repairs, many aren’t willing to pay for preventative maintenance.“Consumers are likely to opt in to the kinds of services that get them back on the road faster and safer,” he said. “They may not immediately agree to do the work that might be proactive.”Synchrony’s Car Care Credit Card breaks those larger payments into smaller monthly installments, Mait said.Tariffs to worsen expensesIn a June survey of 1,000 Synchrony’s card holders, just half said they could afford an unexpected expense of $1,000, Mait said.“The primary word that keeps getting used is ‘anxiety,’” he said. “Consumers are anxious about not necessarily knowing how this is all going to play out.”The rise in consumer uncertainty comes amid broader inflation and tariff-induced concerns, Mait said. Because parts for repairs are sourced globally, tariffs could “have a major influence on the cost.”“[Consumers] need to maintain a proactive mindset toward vehicle health,” he said. “If they’re not under warranty anymore, they need to be mindful of the expenses that are coming their way.”Tune in to “Weekly Wrap” to hear Mait’s conversation with AFN Associate Editor Aidan Bush.

Auto companies saw mixed results in the second quarter related to sales and finance volume, as Carvana’s originations surged, Ford Credit’s earnings rose and Credit Acceptance Corp. and Penske Automotive faced declines.Carvana’s originations soared 51.1% year over year in Q2 to $3.1 billion, while Credit Acceptance Corp.’s originations plummeted 14.6% YoY on a unit basis to 86,486, according to the lenders’ earnings reports.Captive Ford Credit saw an 88.1% YoY increase in earnings before taxes to $645 million in Q2, though its finance penetration rate of U.S. Ford Motor sales fell to 33% in Q2, compared with 51% a year earlier, according to its earnings report.Retailers Asbury Automotive and Penske Automotive faced declining finance and insurance profits. Asbury Automotive’s F&I revenue fell 5.4% YoY to $182 million, while Penske Automotive’s F&I revenue dropped 3.9% YoY to $200.5 million, according to the retailers’ earnings reports.Retailers also saw mixed new- and used-vehicle inventory in Q2. Asbury Automotive reported new-vehicle inventory down 13 days YoY at 49 days’ supply, while used inventory fell one day YoY at 37 days’ supply. Penske’s new-vehicle inventory hit 57 days’ supply, up YoY from 49, while used vehicles fell YoY to 44 days from 47.Also last week, asset management firms KKR & Co. and Pacific Management Co. agreed to purchase a stake in Harley-Davidson Financial Services and buy more than $5 billion in existing loan receivables, according to a July 30 Harley-Davidson announcement. The announcement came days before Harley-Davidson appointed Artie Starrs, chief executive of Topgolf, to be its new chief executive starting Oct. 1.In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends across second-quarter bank earnings for the week ended Aug. 1. 

Pagaya Technology’s lenders are leaning on the expansion of their dealership networks for growth as credit quality worsens and credit access remains mixed. Credit access climbed 3.6% year over year and 0.8% month over month in June according to the DealerTrack Credit Availability Index published July 10. This marked the second consecutive month of credit access expansion following a dip in April as consumers rushed to purchase vehicles ahead of expected tariff-induced price hikes.  The index ended the month at 97.3. However, June’s expansion follows mixed reports of credit access as many consumers entered the market with FICO scores up to 100 points lower following resumption of student loan delinquency reporting in the first half of the year. These market trends prompted lenders to look for ways to grow without loosening credit standards, Sanjiv Das, president at Pagaya, told Auto Finance News. Pagaya purchases loans that meet its underwriting criteria from lenders and securitizes the loans to fund further originations. “Our lenders are gradually starting to lend more,” he said. “They are spending a lot more of their efforts on dealers and building their networks, as opposed to expanding their credit box.” Pagaya sees volume growth Pagaya reported a 50% quarter-over-quarter increase in the second quarter in its auto annualized run rate, which surpassed $1.1 billion in Q1, according to a May 7 letter to shareholders. However, auto volume decreased 7% YoY.  “Last year was a relatively tough year for the entire auto industry,” Das said. “When you're in the public markets as a public company, you're always being pushed for growth, until one day that growth story cracks and falls on the other side.” Slowed growth pushed Pagaya to focus on maintaining consistent yield for investors, he said. Simultaneously, its lenders reduced volume through the end of 2024, when consumers appeared to be in better shape.  Consumers seem to be in good shape “through the middle of 2025, and so we have significantly opened up our pipes into our lenders,” Das said, noting that Pagaya increased its volume with lenders because investor appetite has strengthened. 

Ally Financial, Chase Auto and Wells Fargo Auto all reported an increase in auto originations in the second quarter, driven in part by a pull-ahead in car purchases by consumers anxious to buy before tariff-induced price rises.  Ally Financial’s auto originations jumped 12.2% year over year in Q2 to $11 billion, while Chase Auto’s originations ticked up 4.6% YoY to $11.3 billion. But the bigger news was Wells Fargo’s auto originations surging 86.5% YoY to $6.9 billion, according to the banks’ earnings reports. Huntington Auto Finance’s originations rose 9.5% YoY to $2.3 billion. Ally Financial and Chase Auto also reported growth in lease volume during the quarter.  Meanwhile, credit performance improved across most banks in Q2, with auto delinquencies and net charge-offs down YoY. Bank of America’s auto net charge-offs declined 3 basis points YoY to 0.17%. Regional bank performance was mixed, with U.S. Bank’s indirect loan and lease originations down 29.1% YoY to $1.4 billion and auto outstandings up at Fifth Third Bank and PNC Financial. Also last week, auto lenders dived into trends across automation in underwriting in the Auto Finance News webinar “Digital Strategies for Exceptional Customer Experiences.” In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends across second-quarter bank earnings for the week ended July 18. Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 15-17 at the Bellagio Las Vegas. To learn more about the 2025 event and register, visit www.AutoFinance.live/AFS.

President Donald Trump’s One Big Beautiful Bill marks the end of the federal EV tax credits at a time when sales of used EVs and hybrids are ramping up and new EV sales are slowing. The bill, signed July 4, could spur additional incentives at the state level and from manufacturers as the federal credits end nearly seven years early. The bill moves the expiration date up to Sept. 30 versus the initial end date of Dec. 31, 2032.  At the same time, lower prices and more models coming off-lease contributed to an uptick in used-EV sales in May, while new EV sales declined year over year. Hybrid sales have also been on the rise, with gas-hybrid sales making up a record 12.6% of total vehicle sales in April.  In powersports, several Harley-Davidson dealerships have closed their doors amid a dip in motorcycle sales and in tandem with leadership changes at the company.  Weaker motorcycle sales mirror trends in the wider powersports market headed into the summer months, with powerboat retail sales down 9% YoY through April and North American RV registrations down 5.6% YoY in May. On the tech front, Santander Consumer USA has launched a new pre-qualification dealer lead generation tool, and CarMax is gearing up to launch updated versions of its chatbot tools for associates and customers. In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss the latest updates on electric vehicles, incentives, powersports and technology for the week ended July 11. 

Second-quarter sales of new autos were mixed following a spike in March and April ahead of tariffs taking effect, while incentives were robust during the Independence Day holiday weekend. Most major manufacturers saw a rise in vehicle sales in Q2, with General Motors and Hyundai Motor America reporting the best first half of the year in terms of sales. June, however, marked a slowdown in sales for some automakers. The July 4 holiday brought a mix of 0% financing and cash back offers, with incentive spend varied by brand.  Meanwhile, credit unions are putting excess lending capacity to work, evidenced by an uptick in application volume at fintech Origence, which provides technology and financing capabilities for credit unions. While application volume rose year to date through June, the fintech’s ratio of funded loans to applications fell due to higher loan-to-value ratios in the market as consumers lean on longer-term loans to manage monthly payments.  Alloya Corporate Federal Credit Union issued its first asset-backed securitization deal on July 1, a $150 million transaction backed by prime auto loans issued by Blaze Credit Union, Consumers Credit Union and Interra Credit Union.  In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss the latest updates on sales, incentives, funding and capital markets for the week ended July 4.

Sales of used electric vehicles are ramping up as it becomes more likely the federal EV tax credit will end and as off-lease EVs return to market.  Second-quarter used EV sales are projected to surpass 100,000 units, setting a record and following a 32.1% year-over-year jump in May to 36,609 units. By contrast, new-EV sales declined 10.7% YoY in May to 103,435 units. With strong sales, used EV supply has diminished, reaching a three-year low in May. Used EV inventory was 40 days’ supply in May, down 11% YoY, according to Cox Automotive.  Uncertainty surrounding the fate of the federal tax credit for new and used EVs is one driver behind consumer demand in recent months, combined with state-level incentives. Meanwhile, tariffs and the resumption of student loan payments and credit bureau reporting could impact auto loan credit performance in the coming months.  In powersports, mixed sales and rising inventories have prompted a wave of promotions from manufacturers that range from increased cash rebates to lowered rates on certain models.  In this episode of the “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends in electric vehicles, credit performance and powersports for the week ended June 27. 

 Listen to this special episode of the “Weekly Wrap” podcast, as Black Book’s Lawrence and National Powersport Auction’s Amata join Auto Finance News Associate Editor Aidan Bush to discuss motorhome and towable trends for the week ended June 20.  

While credit access improved in May and vehicle prices were steady, affordability remained a concern, especially for credit-challenged consumers who face multiple forms of debt. The Dealertrack Credit Availability Index increased 2% year over year in May to 96.7 as credit unions and banks loosened standards and approval rates improved. At the same time, the average new-vehicle transaction price ticked up 1% YoY but was nearly flat month over month at $48,799.  But as student loan payments resume and that debt is again reported to credit reporting agencies, some nonprime borrowers are turning to credit-builder loans and buy now, pay later programs to improve their credit history and finance downpayments for vehicle purchases. Meanwhile, in one of the first actions since the Consumer Financial Protection Bureau undertook a more limited approach to supervision under the new administration, the California State Senate passed a bill that would allow dealers to increase document fees to a maximum of $500. The current processing charges, in effect since 2019, are $85 for new cars and $70 for used cars. The change would align the state’s processing fees with that of other states but has received backlash from some consumer advocacy groups that claim the uptick is another “junk fee.” In other news, Arra Finance acquired Crescent Bank’s $815 million auto portfolio and plans to grow originations by leveraging the bank’s technology stack and dealer base. Other auto finance companies have also seen growth in the first part of the year, including Carvana and Global Lending Services.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends in affordability and compliance along with company updates for the week ended June 13. 

Amid increased vehicle values, a rise in vehicle repossessions and continued tariff-induced uncertainty, Auto and powersports players are implementing new leadership, positioning themselves for growth and weighing incentives to weather macroeconomic challenges. Prices for every major vehicle segment except compact cars saw a year-over-year increase in May, according to Cox Automotive data published June 6. EV values and used-vehicle values may be normalizing after a pre-tariff purchase surge, according to Jeremy Robb, senior director of economic and industry insights at Cox Auto. The rate of 30-day plus auto delinquencies fell 18 basis points YoY in the first quarter, according to an Experian report released June 5. Auto inventory also fell in the regions covered by the Federal Reserve banks of Philadelphia and Cleveland, prompting higher prices, according to the Fed’s June 4 edition of the Beige Book. National repossession assignments reached 2.1 million year to date through April, though lenders are delaying filing repossession papers. In the nonprime space, lenders are looking at using AI technologies and speeding funding time while preparing to slow their activity in the wake of tariffs, according to panelists at the Non-Prime Auto Financing Conference on June 4 and 5, respectively.  Amid supply chain concerns and tariff-induced market uncertainty, captives are meeting with their OEM partners and deciding whether to keep incentives they began in response to the tariffs.  Meanwhile, powersports lender Ironhorse Funding, which funds more than $20 million per month in originations, is seeking over $120 million in forward-flow commitments. In the marine world, dealers have reported a rise in repower, or boat engine replacement sales. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends in affordability and powersports for the week ended June 6.  

Major players in the auto and powersports industries continue to adapt to the rapidly changing macroeconomic environment teeming with the effects of tariffs and rising inflation. Where some see opportunity, others see indications of a challenging fiscal year.  As consumers continue to grapple with affordability, which has been further pressured by tariffs, auto refinancers see an opportunity as delinquencies rise. TransUnion’s Q1 2025 Credit Industry Insights Report shows the 60-plus day delinquency rate at 1.38%, the highest first-quarter peak since 2009 during the Great Recession.  As consumers search for ways to save on costs, PenFed Credit Union’s refinance applications are up 75%, according to Chris Kleczynski, vice president and head of auto lending product strategy.  Another tariff shakeup occurred last week after a federal court ruled President Donald Trump’s unilateral levies were unconstitutional, though an appeals court reversed the block within 24 hours.  With a backdrop of tariffs, consumer spending growth slowed, with personal spending up 0.1% in April compared to a 0.7% growth a month prior. While some parts of the auto industry are experiencing upticks in sales and pricing in this uncertain environment, the powersports market is declining. Towable vehicle values dropped 9.3% year over year in April. Eric Lawrence, Black Book’s principal automotive analyst, said that the motorhome and towable market will likely experience further decline in the coming months. Boat registrations fell 14% YoY in April, according to BMO Capital Markets, and Bombardier Recreational Products noted a drop in retail sales, both related to tariff shocks and uncertainty.  In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends in affordability and powersports for the week ended May 30. 

Uncertainty defined much of the conversation at Auto Finance Summit East 2025 last week in Nashville, Tenn., with auto lenders highlighting affordability, auto tariffs, EV dynamics and technology as top-of-mind considerations headed into the rest of the year.  Auto tariffs were a resounding theme throughout the event, as lenders discussed inventory and pricing dynamics, mixed consumer demand and the possibility of longer-term loans to address affordability.  Against the backdrop of higher vehicle prices and tariffs, Chase Auto and Santander Consumer USA are leaning into relationships with manufacturers to drive growth. Auto lenders are also diving into AI and automation to improve customer experience, tap refinance demand and enhance underwriting processes. Despite potential elimination of the federal EV tax credit, lenders are bullish on the sector as manufacturers remain committed to electrification goals. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss top takeaways from Auto Finance Summit East 2025. 

Powersports lender Synchrony is working closely with dealerships to align financing options with consumer appetite and sales goals. West Palm Beach, Fla.-based Broward Motorsports of Palm Beach, for one, benefits from offering low-rate financing options through financiers such as Synchrony, Alex Reyes, sales manager at the motorcycle dealership, told Auto Finance News. He said the Synchrony Outdoors credit card provides flexibility for consumers. Financing appetite has “grown tremendously” in the powersports market, Reyes said. He has more than 15 years’ management experience in the automotive and powersports industries.Meanwhile, promotions across the market have been largely steady over the past few months, Synchrony Senior Vice President Susan Medrano, who is also general manager of Synchrony Outdoors, told AFN. Synchrony also helps educate dealers on what financing options and promotions may work best for their customer base that will meet the dealership and manufacturers’ goals.Listen to this special episode of the “Weekly Wrap,” podcast, as Synchrony’s Medrano and dealership manager Reyes join Auto Finance News Editor Amanda Harris to discuss financing and sales trends during National Small Business Week, which takes place May 4-10. 

Capital One is looking at ways to expand the use of AI-based agents on the heels of launching its agentic AI-based tool, Chat Concierge, earlier this year.Chat Concierge answers customer queries and can help with tasks such as comparing available vehicles and exploring financing options online before consumers head to a dealership.  In building its tech stack, Capital One reviewed how consumers use AI-based tools, the types of questions they ask, and how digital communication can be used to drive customers into the dealership, Annie Fallows, head of the bank’s dealer-facing Navigator Platform, told Auto Finance News. Navigator Platform, launched in 2023, allows dealers to access information such as inventory searches and pre-qualification to provide more accurate financing offers to customers. “We made an intentional choice that we wanted to lead with being helpful versus lead with immediately trying to collect [a customer’s] name and contact info,” she said. “Our dealers are able to take all that information about what's happened on the chat to pick up in store and get to that car sale that everyone is working for. This is just the beginning of the journey.” The bank is reviewing ways to improve Chat Concierge and apply it to other operations both internally and externally, Fallows said, “whether that’s making our associates more effective [or] looking at additional places in the dealer process that would benefit from this type of interaction.  “We’re at the beginning of a new journey, and it starts with making sure that our models and our technology are working the way that they're intended and providing high-quality interactions.” Capital One’s auto originations rose 22.4% year over year in the first quarter to $9.2 billion, while the bank’s auto book ticked up 5.2% YoY to $77.7 billion, according to the bank’s April 22 earnings supplement. During this special episode of the “Weekly Wrap,” podcast, Auto Finance News Editor Amanda Harris and Capital One’s Fallows discuss the latest trends in customer experience, dealer relations and technology.