Auto retailers are gaining momentum on the heels of increased sales and finance volume even as the industry navigates continued affordability headwinds.
Carvana last week opened its first test-drive center in Dallas after acquiring seven Stellantis dealerships to expand into new-car sales.
The Tempe, Ariz.-based retailer sells new and used vehicles online and reported a 40% year-over-year increase in retail sales in the first quarter to 187,393 units.
Retailer CarMax also reported a 3.3% YoY uptick in combined retail and wholesale used-vehicle sales in Q1, while CarMax Auto Finance’s originations rose 5.5% YoY to $2.4 billion.
From an affordability perspective, interest rates on new- and used-vehicle loans declined by mid-June. The national average interest rate on a 60-month loan for a new car decreased 97 basis points YoY to 6.74% as of June 15, according to Curinos.
With lower rates and longer-term loans, consumers are opting to refinance their auto loans for lower monthly payments.
Lenders also are adding more longer-term loans into asset-backed securitization deals as 72-plus-month terms gain traction. At the same time, auto financiers are keeping a close eye on funding costs and loan performance.
Meanwhile, powersports companies have been active with capital funding ventures this month. Octane sold a $340 million portfolio of powersports and outdoor power equipment loans to Bayview Asset Management, while California-based electric RV startup Evotrex raised $30 million in series A financing.
In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Aidan Bush and Associate Editor C.J. Moore discuss top trends across sales, affordability, funding and powersports.
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