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Auto Finance News is pleased to present The Roadmap, the podcast on best practices and trending topics in automotive lending and leasing. If you are in auto finance, this is your podcast.
Auto Finance News, published by Royal Media, is the flagship publication for the auto finance industry. Published since 1996, Auto Finance News is the nation’s leading source for news, insights and analysis on automotive lending and leasing.
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Johnnie Martinez 15:20:30
Hello, everyone, and welcome to the roadmap from Auto Finance News. Since 1996 the nation's leading newsletter on automotive lending and leasing. It is Monday, june 1. I am Johnny Martinez. Second, last week the auto finance industry navigated a mix of affordability pressures, regulatory scrutiny, technology investments, and evolving fraud risks. We'll start on the compliance front, where the Federal Trade Commission publicly identified 97 dealership groups that received warning letters over potentially deceptive vehicle pricing practices. The letters set back in March are released following a Freedom of Information Act request underscore in the agency's continued focus on pricing transparency and consumer protection. Risk management was another major theme, as lenders warned that advances in generative AI could make fraud more sophisticated and harder to detect. AI-enabled fraud remains one of the biggest concerns, as criminals increasingly use technology to create more convincing application documents and identities. At the same time, lenders emphasize that AI can also be part of the solution. Machine learning and automation are helping improve underwriting, fraud detection, and verification processes, while stressing that technology cannot replace sound credit fundamentals. Dealer-lender relationships were also in focus last week, with captive finance executives pointing to speed of funding and F and I profitability as their top priorities for working to strengthen dealer partnerships. The challenge is delivering faster decisions and funding without introducing additional risk into the process. In other technology news, Kunis Auto and RV Group's first chief technology officer outlined plans to standardize technology systems across the company's automotive and RV operations, highlighting the growing importance of data integration and operational efficiency as dealership groups continue to expand. Meanwhile, fintech lender Yendo expanded its product lineup with the launch of an unsecured card aimed at non-prime consumers, broadening its offerings beyond asset-backed credit products. Next, I'll turn it over to our editor, Amanda Harris, to discuss what's fueling growth in auto ABS issuance, and which lenders posted some of the strongest portfolio gains in the industry in 2025
Amanda Harris 15:23:05
Okay, thank you, Johnny. First on the auto asset back securitization market volume once again rose and was at 79 point 3 billion as of may 29 which is up 3.9% year to date, compared with the same period a year ago. Prime and lease volume was up, while non prime and fleet issuance declined. Issuance is strong, as investors still have a ton of capital to put to use, and auto continues to be attractive for all types of investors. The past week was active for captive issuance, with Slantis Financial Services and Nissan Motor Acceptance Company coming to market with Prime deals. The deals reflected changes in average FICO scores, interest rates and terms compared to prior issuances. GM Financial also issued $961 million across two floor plan ABS deals on may 27 and we'll continue to have more updates on auto ABS spreads and trends this week. So, stay tuned. Turning to lenders growth trends, I analyzed our latest Big Wills rankings data, which, as most people know, rank auto lenders by outstandings this time for year in 2025 I looked at which lenders made up the top 10 in terms of largest year over year percent change in auto outstandings, to name a few: Autonation, Lend Buzz, Slantis Financial Services, Carvana, and Global Lending Services. Autonation's portfolio, for example, jumped 109% year over year in 2025 to just over 2.2 billion, with growth expected again this year as a captive increases its financing penetration rate of sales across Autonation retail stores. Global Lending Services is also eyeing continued growth this year through additional and deeper relationships with dealer partners, especially in the independent space, as well as growth and pass-through programs with Ally Financial and Capital One, as well as a couple large captives, DLS portfolio increased by about 36.7% year over year to 10 point 4 billion in 2025 We'll also have further updates on lenders' growth plans this year and the coming weeks, so make sure you follow along. This time I'll turn it over to Aiden to talk about a shift toward used vehicles, affordability, and other key themes from Auto Finance Summit East. Aiden,
Aidan Bush 15:25:14
thank you so much, Amanda. As Amanda mentioned, there's been some resiliency in both used vehicle borrowing and non-prime borrowing. That we reported on last week, we can start with the used vehicle side. There basically, the share of used vehicles that made up the total kind of lending industry wide totaled 58.5% So, of all borrowing, a little over 58% was used vehicle borrowing, and that is slightly up from 58.2% in Q last year that comes from Experian data that released last week, and it really comes despite declining used vehicle sales volume year over year as well. It should be noted that while used vehicle sales are down year over year, they were not impacted as greatly year over year as new vehicle sales were. For those reasons, we've seen Navy Federal Credit Union report an increase in its own used vehicle financing mix up to about 63% this year from a little over 54% this time in 2023 Part of the reason we're seeing that and the uptick in nonprime financing is the sustained vehicle affordability pressures from new vehicles, coupled with consumers having more funding to purchase used vehicles from tax return season, so the use segment did show year over year increases in total vehicle transaction prices, monthly payments, and total loan amounts, according to Experian, but those increases rose at a slower amount than new vehicle amounts and new vehicle monthly payments, and they remain significantly below new vehicle kind of costs. Overall, non-prime financing, as I mentioned, is rising year over year alongside used, making up a little over 31% of all auto loans, and that is up from 29.9% of all auto loans this time last year, as I mentioned, buy here, pay your dealers like top-notch used cars told me that used and subprime financing are both up, as better credit consumers are actually shopping lower down the chain, so if they were buying a new vehicle before, they might be buying a used vehicle now due to those affordability pressures. I think that is all from me this time. I will mention, though, that the final piece to this affordability concern, I think we heard from Auto Finance Summit East, is the leasing section of that. We had some early stories about used and CPO leasing opportunities, but we'll have a story come in a few days to really wrap up kind of the state of the leasing market and how that may be a lever for consumers facing affordability pressures in the future. With that, I will turn it back over to Johnny.
Johnnie Martinez 15:27:51
Fantastic, thank you, Aiden. One brief power sports note: BRP slashed its fiscal 2027 earnings guidance by nearly 46% at the midpoint after revised US tariffs increased expected costs by as much as 293 million, prompting the power sports manufacturer to cut spending, improve supply chain efficiency, and adjust pricing strategies. Despite the tariff headwinds, BRP posted stronger than expected for first quarter results, with revenue rising 29.5% year over year to 1.8 billion this week. As I mentioned, we will have a feature story on the state of the leasing market. We will also have further looks at the trends impacting auto finance and power sports finance, including news from the non-prime auto financing conference in Irving, Texas. As always, thank Thanks for joining us on the roadmap. And be sure to follow us on X and LinkedIn. We'll see you online at Autofinance news.net and here next time you Oh.
Transcribed by https://otter.ai