The Auto Finance Roadmap

In the first quarter, the auto finance industry balanced strong auto loan originations with persistent affordability challenges, shifting EV demand and rising asset-backed securitization activity. Auto lenders, including PenFed Credit Union, Driveway Finance and Carvana posted strong first-quarter gains, signaling continued demand for auto loans, according to their earnings releases last week. PenFed’s originations jumped 88% year over year, while Driveway Finance’s originations rose 34.8% YoY and Carvana’s originations increased 59.3% YoY as digital sales and product expansion drove growth. Affordability, however, remained a key constraint with Q1 earnings for dealership groups, including Asbury Automotive Group, Group 1 Automotive and Penske Automotive, showing declines in sales and mixed finance and insurance revenue. To offset pressure, dealers are leaning on longer loan terms and payment-focused financing strategies as higher vehicle prices and interest rates continue to affect consumers. Meanwhile, OEM captive finance performance varied, as GM Financial’s originations declined 15.8% YoY, while Ford Credit reported higher finance and lease penetration in Q1. In addition, Stellantis returned to profitability, supported by higher vehicle sales and growth in its financial services operations. Toyota reported a sales decline in March as weakening demand and geopolitical tensions tied to the Iran war weighed on performance. Lenders are also expanding credit access to sustain growth, with Western Funding launching full-spectrum lending. Wider market conditions shift EV demand remains an industry focus, as Rivian’s deliveries increased 20% YoY in the first quarter, supported by growth in software and services revenue, according to its April 30 earnings presentation. Auto ABS issuance rose 5.1% as of April 24. Lease ABS outperformed the broader market as investor demand remained steady, according to JPMorgan Securities data. However, potential changes to SEC disclosure requirements could increase regulatory risk for ABS issuers, adding uncertainty to the funding environment. Lastly, Federal Reserve officials held interest rates steady although the split vote signaled growing internal division over the policy outlook amid heightened economic uncertainty. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez II and Senior Associate Editor Aidan Bush discuss top trends across macroeconomic dynamics, affordability, funding and powersports lending for the week ended May 1. Subscribe to “The Roadmap Podcast” on iTunes or Spotify or download the episode. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with the Auto Finance Summit East and the Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live.

Lenders’ auto originations were mixed in the first quarter, though most reported declining delinquencies.Originations reported by major banks include:Ally Financial, up 12.8% YoY to $11.5 billion;CarMax Auto Finance, down 1.5% YoY to $1.9 billion;Chase Auto, down 2.8% YoY to $10.4 billion;U.S. Bank indirect loan and lease production, mostly made up of auto loans, up 47.3% YoY to $1.7 billion; andWells Fargo Auto, up 110.9% YoY to $9.7 billion.Bank of America did not break out auto originations. However, its indirect and direct consumer outstandings, primarily consisting of auto and specialty lending loans, fell 0.4% YoY to $53.9 billion. Ally, Chase, U.S. Bank, Wells and PNC Financial reported YoY declines in auto loan delinquencies.Fifth Third Bank’s rate of 30- to 89-day delinquencies dropped 7 basis points YoY to 0.61%.Listen as Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Senior Associate Editor Aidan Bush dive into first-quarter earnings and highlight trends across credit performance, auto loan growth and technology updates.Subscribe to “The Roadmap Podcast” on iTunes or Spotify or download the episode.Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live.

Auto lenders are working to balance growth against rising credit and affordability pressures as the market adjusts to shifting consumer behavior in 2026. Luxury vehicle financier Rizz Lending this month secured a $300 million warehouse facility to scale originations to about $200 million this year. Meanwhile, fintech lender Lendbuzz is targeting 20% growth in originations by adding near-prime borrowers and using cash-flow-based underwriting. Meanwhile, other players, including Credit Acceptance Corp., remain focused on underserved consumers, a segment of more than 90 million Americans. Consumers are also adjusting to affordability constraints by changing their approach to car buying. Down payments declined in the first quarter while loan balances rose, and longer-term financing – including 84-month loans – reached record levels. Meanwhile, fewer consumers are applying for auto loans even as rejection rates decline, signaling softer demand. At the same time, credit conditions continue to tighten. Canada’s goeasy, a subprime lender, reduced its auto exposure and tightened standards after charge-offs surged. Lenders also pointed to weak dealer data and rising subprime delinquencies as ongoing risks. Concerns arose around data quality because AI-driven “credit washing” distorts borrower profiles. Meanwhile, auto sales slowed in the first quarter, partly due to comparisons to the unusual tariff-driven surge in 2025. Higher-income buyers continue to support demand, while consumers shift to used vehicles or exit the market.Funding markets remain stable, with only modest widening in auto ABS spreads and steady investor demand, though banks are becoming more cautious as private credit exposure grows. Still, leasing may provide an offset, with Credit Union Leasing of America projecting growth as lenders seek alternatives to long-term loans. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez II, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss top trends across macroeconomic dynamics, affordability, funding and powersports lending for the week ended April 3. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with the Auto Finance Summit East and the Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live.

AI adoption is changing how auto finance companies approach efficiency gains and how the industry scales, Sanjiv Yajnik, president of financial services at Capital One, tells Auto Finance News in the latest episode of “The Auto Finance Roadmap” podcast. “The rate at which we are innovating right now, given AI, is unbelievable,” he says.Technology and AI-based tools are making processes faster and less expensive, Yajnik says. “People do research in a different way,” he says. “They can find things in a different way. It's much faster.” On the other hand, technology is contributing to shifts in the industry’s structure, Yajnik says. “Industry structures are based on two things. One is scale, because scale determines how quickly and how consolidated an industry grows, and the other is [that] the demarcations between two industries dissolve,” he says. While historically, “sometimes, there is one industry that does only finance, and another does only search. When technology comes to bear, there's a reason they are separate, because you need to pour a lot of money into it [and] you need certain expertise,” he says. “But when that expertise changes, the industries collapse into something completely new, and this is why incumbents often get left behind.” Adapting to changes in technology industrywide requires building from the ground up, Yajnik says. “When you've got major technological change, it's hard to be a generalist and say, ‘I'll just get these engineers, and I'll make them do a few things,’” he says. “You have to get fully into it 100% and start playing with all the things yourself.” Yajnik holds 27 patents, with more pending. Capital One’s auto originations increased 8.5% year over year in the fourth quarter of 2025 to $10.2 billion, with auto outstandings up 8.8% YoY to $83.6 billion. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Capital One’s Yajnik discuss AI innovation in auto finance, including responsible use of AI and technological changes still to come in the industry.

Despite a rise in subprime financing share in the fourth quarter of 2025, affordability remains a key focus for auto lenders and dealers as lower-income consumers continue to be disproportionately affected by higher everyday costs. Subprime share of total vehicle financing in Q4 2025 stood at 15.3%, up from 14.5% a year earlier, according to Experian data. Prime borrowers continued to lead market share for new-vehicle financing as subprime customers remain challenged by high vehicle costs, but Federal Reserve interest rate cuts and tax refunds will potentially bring some relief in 2026. Affordability challenges contributed to a slowdown in retail vehicle sales across much of the country in the first part of the year, evidenced by trends in the March 3 edition of the Fed’s Beige Book. Dealers across many Fed regions reported flat to decreased new- and used-car sales as higher interest rates and rising gas prices further tightened consumers’ wallets. The war in the Middle East has contributed to higher oil and gas prices since the U.S. and Israeli strikes on Iran on Feb. 28, which could raise funding costs and prompt a shift in investors’ strategies. Meanwhile, powersports lender Octane has shored up additional funding as it aims to grow originations and its captive-as-a-service offering. New York-based Octane’s originations rose 29% year over year to $2.1 billion in 2025. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez II and associate editor Aidan Bush discuss top trends across macroeconomic dynamics, affordability, funding and powersports lending for the week ended March 6.

Drivers underestimate the cost of owning a vehicle by nearly $4,500 a year, underscoring mounting affordability pressures across the auto market. There is a growing disconnect between consumer expectations and the rising expenses tied to maintenance, repairs, insurance and everyday vehicle use, Keith Mait, senior vice president and general manager of Synchrony Financial’s auto business, told Auto Finance News during a special episode of the “Weekly Wrap” podcast. That was among results of the lender’s survey, released Feb. 17, that polled 1,030 U.S. adults responsible for a vehicle’s upkeep via the Ask Suzy online platform. “We see it every day in the average order values, or the transaction sizes, that find their way onto our cards. They haven’t gotten smaller,” he said. “Over the last four or five years, we’ve seen continuous incline in the average transaction values, both the first time somebody engages with us and on the repeat side.”Evaluating affordabilityAs consumers grapple with elevated new-vehicle prices, many buyers opt for used vehicles, extend lease terms or hold on to their cars longer, Mait said. While today’s vehicles last longer, they also feature more advanced technology, sensors and specialized components that can drive up repair costs, he said. “When we try to evaluate consumer affordability vis-a-vis how they want their mobility to occur, it leads you to believe that they expect better quality,” Mait said. “They expect more for their dollars and they expect to have these vehicles for a long time, so making sure that they’re operating properly comes with [a] cost.”In this episode of “Weekly Wrap,” Auto Finance News Deputy Editor Johnnie Martinez II discusses trends affecting today’s car buyers with Mait.

Auto and powersports financiers mostly reported lower originations and sales for the last quarter as shifting spending patterns by cash-strapped consumers fuel uncertainty. Lenders that reported fewer sales and loan originations, according to their respective earnings releases, include: Credit Acceptance Corp.’s consumer loan assignment volume, down 9.1% year over year in its fourth quarter; GM Financial’s Q4 loan lease originations, down 18.7% YoY; OneWater Marine’s F&I revenue, declined 5.4% YoY in its fiscal first quarter; Tesla’s lease portfolio in Q4, dropped 12% YoY; and Volvo’s North American Q4 sales, down 19.6% YoY in Q4. However, some financiers reported positive results last quarter: Group 1 Automotive’s F&I revenue climbed 1.9% YoY; Polaris’ Q4 sales climbed 9.5% YoY in Q4; and MarineMax’s F&I revenue for its fiscal Q1 climbed 0.9% YoY and total revenue climbed 7.8% YoY. Meanwhile, mergers and acquisitions in the RV and marine industries are on the rise after a yearslong slowdown following the pandemic. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live.

Gaps in data verification likely contributed to missed double-pledging of assets at Tricolor Auto, prompting changes at rating agencies, Larry Chiavaro, president at his consulting company LC Advisors Group, told Auto Finance News during a special recording of the Weekly Wrap podcast. Chiavaro also served as executive vice president and co-founder of First Associates Loan Servicing from 2010 to 2021. That company was rebranded as Vervent in 2020. The backup servicer took over Tricolor’s portfolio following the company’s Sept. 10 bankruptcy filing. Tricolor is under investigation for allegations of fraudulently double-pledging assets to warehouse lines, with former Tricolor Chief Executive Daniel Chu and other former Tricolor executives facing a federal indictment alleging they committed fraud at the company. The Tricolor bankruptcy served as a “wake-up call for the industry” and has spurred changes, Chiavaro tells AFN.In this special episode of the Weekly Wrap, Auto Finance News Founder and CEO JJ Hornblass joins Chiavaro to discuss the collapse of Tricolor Auto, backup servicing operations and risk management.

An uptick in repossessions, continued affordability challenges and weakened credit performance are top of mind for lenders headed into 2026. The shutdown of several lenders this year combined with inflationary pressures is likely to contribute to more repossessions at the end of 2025 and in early 2026. By Dec. 31, repossession assignments nationally are projected to surpass 10.5 million units for the year, according to American Recovery Association data. At the same time, credit performance continued to worsen across securitized nonprime auto loans in November while prime loans had some deterioration. This bifurcation in credit tier performance is expected to continue next year. Car sales have also been challenged as consumers face high sticker prices and shift to used vehicles, creating more competition in the market. CarMax’s used-vehicle sales fell 8% year over year in its fiscal third quarter to 169,557 units, while CarMax Auto Finance’s originations declined 9.3% YoY to $1.8 billion. Meanwhile, Auto Finance News is pleased to name Sanjiv Yajnik, president of financial services at Capital One, the 2025 Auto Finance Executive of the Year. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends across sales, affordability and credit performance for the week ended Dec. 19.

Electric vehicle sales declined at most major manufacturers in November on the heels of an uptick in EV share of total new-car sales in the third quarter, due in large part to a pull-ahead of purchases before the federal EV tax credit expired. Automakers including American Honda, Ford Motor, Hyundai, Subaru and Toyota reported double-digit year over year declines in EV sales during the month, while overall sales were mixed. EV sales slowed in November but in Q3 benefited from consumers wanting to take advantage of the federal tax credit of up to $7,500 before Sept. 30, contributing to a jump in new-vehicle EV financing share to 11.4%. A strong tax refund season is projected to boost car sales in early 2026 as some consumers lean into the used-car market due to affordability concerns. Used-vehicle values were flat YoY and up 1.2% month over month in November, according to the latest Manheim index. In powersports, sales were mixed for the most recent quarter. Canadian powersports manufacturer Bombardier Recreational Products’ North American retail sales declined 4% YoY in its fiscal third quarter ended Oct. 31. RV manufacturer Thor Industries’ net sales, however, jumped 11.5% YoY in its fiscal first quarter ended Oct. 31. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends across vehicle sales, pricing, consumer sentiment and powersports for the week ended Dec. 5. This episode is sponsored by The Work Number by Equifax.

Last week brought more shakeups in the auto finance industry as lender Flagship Credit Acceptance announced it was finalizing a sale of the company to an investment firm, while Prestige Financial Services stopped originations. Chadds Ford, Pa.-based Flagship announced on Nov. 21 that it had entered into an agreement to sell the business to New York-based InterVest and would be rebranded to Flagship Financial Group, according to a company release. Once the transaction is closed, Jim Landy will become chief executive. Prestige Financial Services also informed dealerships that it was stopping originations as of Nov. 20, according to an email obtained by Auto Finance News. Draper, Utah-based Prestige will continue to service its loans and fund contracts received before Nov. 20, according to the email. Prestige also reportedly laid off an undisclosed number of employees this month, AFN reported. Meanwhile, Tricolor representatives were no-shows at the Section 341 Meeting of Creditors on Nov. 18, which was attended by 150 people. The lack of representation was unusual and raised questions about why no one appeared on Tricolor’s behalf. In other news, AFN is pleased to recognize 10 auto finance executives to watch in 2026. These leaders have produced noticeable results in their respective organizations in 2025 and are heading transformative strategies into next year. Listen as Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush unpack the past week’s auto finance.

Auto retailers and fintechs mostly reported growth in the third quarter amid mixed October retail sales, flat vehicle values and some layoffs. CarMax named David McCreight as its interim president and CEO, replacing Bill Nash, effective Dec. 1. Nash is not retiring, and the shakeup comes as the Richmond, Va.-based retailer’s comparable store used-vehicle retail sales are expected to drop between 8% and 12% year over year in the third quarter of its fiscal 2026, according to CarMax’s Nov. 6 release. Meanwhile, EV makers Lucid Motors and Rivian saw deliveries jump 46.6% YoY and 31.8% YoY, respectively, in the third quarter ended Sept. 30. AI-powered lending platform Upstart also saw growth in Q3, with auto loan originations up 357.1% YoY on issuance of 6,705 loans, according to a Nov. 4 Upstart presentation. However, fintech Open Lending saw certified loan volume drop 13% YoY to 23,880, according to its Nov. 6 release. The fall came as Open Lending prepares to roll out a new credit decisioning platform. Vroom subsidiary United Auto Credit Corp. also originated $107 million in the third quarter ended Sept. 30, up 7% year over year but down 6.1% quarter over quarter. The mostly positive Q3 reports came as auto lenders tightened their credit standards. The average new-vehicle auto loan rate increased 19 basis points month over month in October to 9.6%, according to Cox Automotive. This rise is despite a 25-basis-point cut by the Federal Reserve on Oct. 29. Meanwhile, lender Prestige Financial Services reportedly laid off employees in early November, according to posts from former employees. The reported layoffs come as the subprime market faces challenges in affordability and credit performance. With these headwinds and elimination of the federal EV tax credit, automakers reported mixed sales in October. Toyota Motor North America saw sales surge 11.8% YoY to 207,910 vehicles, while Mazda’s sales plummeted 32.6% YoY to 25,161 vehicles, according to the companies. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris discusses trends across third-quarter earnings, vehicle values and sales for the week ended Nov. 7.

Investors are seeking more transparency following Tricolor’s Chapter 7 bankruptcy filing last month, which has also prompted several auto lenders to review their books and assure investors of loan quality and operational health. The auto finance industry and asset-backed securitization issuers could benefit from more transparency and consistency in disclosure policies, panelists said during a session on Oct. 21 at FT Live’s ABS East in Miami. Auto lenders are reviewing their portfolios following allegations levied against Tricolor for double-pledging of assets on its warehouse lines of credit. Ford Credit reviewed its millions of contracts to confirm they “are either not securitized or we are in one deal and one deal only,” Ryan Hershberger, director of global funding and capital markets for Ford Motor, said during a panel at the show. Investors are looking for more information and understanding on how double-pledging could occur, Lendbuzz Chief Executive Amitay Kalmar said at the event. In fact, Credit Acceptance Corp. addressed investor questions in multiple 8-K filings with the SEC as the industry becomes more cautious. Meanwhile, third-quarter earnings point to growth at banks, captives and retailers. AutoNation Finance’s originations jumped 85.7% year over year; Capital One’s auto originations rose 17.2% YoY; Lithia Motors’ finance arm Driveway Finance’s originations rose 41.3% YoY; GM Financial’s originations declined 3.5% YoY; and Ford Credit’s portfolio and earnings before taxes increased YoY. Auto Finance Summit 2025 also highlighted how auto lenders are using AI and machine learning to track borrower habits, and where consumer sentiment is trending. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, senior associate editor Truth Headlam and associate editor Aidan Bush discuss key takeaways from recent industry events, including ABS East and Auto Finance Summit 2025, as well as Q3 earnings for the week ended Oct. 24.