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The Auto Finance Roadmap
22 minutes | 6 days ago
Weekly Wrap: An all-in interest rate cap looms, inclusive lending in the spotlight
Regulatory changes have long been expected with the administration change in Washington, D.C. As the dust beings to settle on the transition, new priorities for Democrats on Capitol Hill are becoming evident — specifically a federal all-in interest rate cap. But how likely is such a bill to pass both the U.S. House of Representatives and the Senate, and what might the auto finance industry have to do to combat a regulation that could push some subprime consumers out of the market?
27 minutes | 14 days ago
What will it take to prop up subprime auto originations?
Subprime origination volume in the third quarter of 2020 continues to lag behind 2019 levels, driven by tightened credit boxes and inventory shortages, even as many lenders turn to digital financing solutions to meet consumer demand. But what pieces need to fall into place to help prop up subprime origination volume? In this episode of the Weekly Wrap, Amanda Harris, JJ Hornblass and Joey Pizzolato discuss the driving forces behind subprime’s slow recovery, what to expect from Axos Bank and Carvana’s new digital direct-lending partnership, and the new opportunities presented by the growing in-vehicle finance industry.
16 minutes | 20 days ago
Q4 earnings wrap on a positive note, dealers prioritize digital at NADA Show
Last week, GM Financial joined Ally Financial and Chase Auto in reporting the surge in fourth-quarter originations that pushed the lenders’ yearend into positive territory. Meanwhile, the virtual NADA Show 2021 concluded last week, where dealers touted the widespread adoption of e-contracting and e-signing capabilities, and Ford Motor announced the launch an online certified pre-owned program.
13 minutes | a month ago
Harley, Truist eye new initiatives as loan performance wavers
Last week’s earnings reports in the auto finance industry were marked by new initiatives from Harely-Davidson and Truist Bank, and signs from Santander Consumer USA and Capital One Auto Finance that borrower health may be faltering.
17 minutes | a month ago
Weekly Wrap: Q4 earnings and credit access trends
ecent fourth-quarter earnings from some of the biggest players in the auto finance industry paint mixed results in loan performance and origination growth. U.S. Bank, for one, saw an uptick in delinquencies and net charge-off rates, but decreased its total provision for credit losses after building a substantial credit loss allowance during the COVID-19 economic crisis. Meanwhile, Ally Financial celebrated a significant increase in auto originations at yearend 2020, and decreased its allowance for credit losses.
13 minutes | 2 months ago
Weekly Wrap: Auto lenders eye growth through innovation
Several auto lenders last week announced innovative ways to expand or improve their business. Chase Auto, for one, has joined with electric vehicle manufacturer Rivian, forming Rivian Financial Services. The program will offer digital-first consumer financing with applications submitted on rivian.com. Wells Fargo Auto, too, is investing in technology to increase automation within its loan–approval process. The lender hopes to up automation to more than 70% by 2022, said Chief Financial Officer Mike Santomassimo. Meanwhile, the Illinois State Legislature passed a 36% “all-in” consumer loan interest rate cap.
8 minutes | 2 months ago
Weekly Wrap: Riots, credit performance and inventory
As the country prepares for a shift in leadership, the industry is looking ahead to 2021 and making predictions. Cox Automotive, for one, expects to see tight supply, low interest rates and increased transaction prices. Fitch Ratings forecasts a deterioration in credit performance due to the pandemic.In this episode of the Weekly Wrap, Amanda Harris and Joey Pizzolato discuss the week’s top stories, and what to expect next week.
17 minutes | 2 months ago
Weekly Wrap: Flagship Credit, Vroom forge new partnerships
The auto finance industry saw multiple partnerships take hold last week. Flagship Credit Acceptance partnered with Pagaya, a fintech asset manager, to add a loan-to-value program to its financing offerings. Vroom, investing funding from its June IPO and September follow-on offering, last week entered an agreement to acquire CarStory, a digital services and analytics company for automotive retail powered by AI.
12 minutes | 3 months ago
Weekly Wrap: Dwindling subprime, falling interest rates and AFN’s Executive of the Year
Last week, Auto Finance News announced that its second annual Auto Finance Executive of the Year Award goes to Ravi Raghu, executive vice president of Capital One Auto Finance’s Auto Dealer business. Meanwhile, interest rates have fallen to a three-year low, big U.S. banks are planning to reduce reserve balances through yearend, and the subprime credit segment neared Great Recession lows.
11 minutes | 3 months ago
Weekly Wrap: A budding leasing trend and the state of auto ABS
Last week, the Auto Finance News team highlighted an uptick of low-mileage lease options as consumers change their driving habits, which could have lasting implications for both consumers and lessors. Used-vehicle values continued to show seasonal strength, and four issuers injected $4 billion in the auto ABS market after nearly a month of no activity.
9 minutes | 4 months ago
Weekly Wrap: Spotlight on used vehicles
Last week, used-car values in the Manheim Used Vehicle Value Index increased once again after a month of decline back toward normal seasonality. Used-vehicle values have squeezed some consumers on the lower end of the credit spectrum out of the market in the third quarter, according to Credit Acceptance Corp.’s Chief Executive Douglas Busk. CAC logged an 8.8% year-over-year decrease in originations last quarter. Meanwhile, competitive pricing is helping credit unions gain market share in the used-vehicle market.
14 minutes | 4 months ago
Weekly Wrap: Recovery momentum builds in latest Q3 earnings
This week, the Auto Finance News team took a deep dive into third-quarter earnings for auto lenders and found that, overall, the industry is seeing further signs of recovery. In this edition of the Weekly Wrap, Amanda Harris, JJ Hornblass and Joey Pizzolato discuss these news developments for the week ending Oct. 30 and what’s on the horizon for next week.
18 minutes | 4 months ago
Weekly Wrap: Industry pushes forward with cautious optimism
This week, the Auto Finance Summit was in full swing, and a resounding theme among executives in the industry was one of cautious optimism. Initial forecasts surrounding the fallout of the coronavirus pandemic haven’t yet come to pass, as the third quarter was marked by strong credit performance, origination volume and used-vehicle values. Still, peak credit losses are expected in 2021, which could be problematic as lenders look to forecast the coming year amid flattening credit loss provisions.
15 minutes | 5 months ago
Weekly Wrap: Q3 earnings kick off
This week, the Auto Finance News team discussed third-quarter earnings for some of the major publicly traded banks, and found some positive trends. In this edition of the Weekly Wrap, Amanda Harris, JJ Hornblass and Joey Pizzolato discuss news developments for the week ending Oct. 16, and the auto industry’s future, as well as what’s to come during the Auto Finance Summit next week.
28 minutes | 5 months ago
Weekly Wrap: The auto finance industry’s future
Auto finance industry professionals are keeping a close eye on demand for new and used vehicles, digital tool adoption and potential leadership changes at the Consumer Financial Protection Bureau as the year winds down. In this edition of the Weekly Wrap, Amanda Harris, JJ Hornblass and Joey Pizzolato discuss these developments for the week ending Oct. 2, and highlight stories to come next week.
19 minutes | 5 months ago
Weekly Wrap: Regulators step up enforcement
This week, the Consumer Financial Protection Bureau announced an uncharacteristic enforcement action against subprime lender Lobel Financial, columnist Marcie Belles penned an analysis on regulators increased interest in the subprime lenders, and fresh synthetic fraud data further illuminated the growing fraud problem in auto finance.
20 minutes | 6 months ago
Weekly Wrap: Auto lenders get creative
Auto lenders continue to experience ups and downs through the COVID-19 pandemic, and it’s becoming clearer by the week what changes are in store for the industry. Still, industry players have found creative ways to navigate the pandemic.
17 minutes | 6 months ago
Weekly Wrap: Auto industry continues recovery
This week, the auto finance industry may be reaping the benefits of lenders and dealers adapting to offer digital car buying solutions during the height of the COVID-19 pandemic. Lenders supported dealer partners and ensured continued cash flow as the pandemic closed dealerships and car sales struggled. New York may be a potential example of recovery as the top 10 auto lenders in the state recorded month-over-month growth of more than 100% in June.In this edition of the Weekly Wrap, Amanda Harris and JJ Hornblass discuss these news developments for the week ending Sept. 11, and what’s to come next week.
18 minutes | 6 months ago
Weekly Wrap: Signs point to recovery
This week, all signs point to the continued recovery of the auto finance sector as the unemployment rate dipped to 8.4% and consumers continued to make partial payments on loans in extensions status.
24 minutes | 6 months ago
Weekly Wrap: Auto industry pulls back on consumer assistance
This week, the auto industry is eyeing potential increases in delinquency rates as long-term deferrals come to an end. Since the COVID-19 pandemic hit the country in March, lenders have made it a priority to help consumers with two to three-month long payment assistance programs. The industry now is seeing payment extensions on securitized auto loans decline, along with the percentage of auto accounts in financial hardship status — accounts with deferred payments, that are in a forbearance program or are frozen or have a frozen past due payment.
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