Auto Finance News | The News That Drives the Industry

Credit Performance

Despite Improvement in May, ABS Credit Performance Likely to ‘Deteriorate,’ KBRA Says

More Prime Consumers Opt for Used Cars as Subprime Loses Share

Auto ABS Volume Closes In on $60B

Despite Improvement in May, ABS Credit Performance Likely to ‘Deteriorate,’ KBRA Says

After 16 straight quarters of improvement, credit quality in prime auto loan securitizations will start to “deteriorate,” according to a newly released report from Kroll Bond Rating Agency. While May servicer reports showed improving credit performance across prime and nonprime auto securitizations, performance is predicted to weaken through the summer months. “With the effects of the […]

More Prime Consumers Opt for Used Cars as Subprime Loses Share

As the percentage of prime and super-prime used-car buyers reached an all-time high in the first quarter, the percentage of subprime loan originations fell to a record low, according to Experian’s Q1 2019 State of the Automotive Finance Market Report published today. “The trend of more prime consumers entering the used market is one we’ve […]

Auto ABS Volume Closes In on $60B

Year-to-date auto securitization volume hit $57.8 billion at the end of April, with prime loan issuance accounting for the lion’s share of transactions, according to research released today by Deutsche Bank. Prime loan securitization volume totaled $23.7 billion, and subprime volume reached $12.8 billion. The remaining volume was comprised of retail lease ($9.8 billion), fleet […]

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Capital Markets

Extended-Term Contracts Lower Credit Quality in Bank of the West Securitization

Extended-term contracts, an increased loan-to-value ratio, and a rise in the number of loans with lower Fico scores are responsible for weakened credit quality in Bank of the West’s $764 million auto trust securitization — the bank’s first of the year — according to a Fitch Ratings’ presale report. The average term of loans securitized […]

Decline in Used-Vehicle Inventory Dampens Dealer Sentiment

Carvana Hits ABS Market With Second Transaction

Longer Terms, Revolving Period Are Risk Factor in Toyota’s Latest $1B ABS Deal

Lengthening Loan Terms a Concern for ‘Healthy’ Subprime ABS Market

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From Auto Finance Excellence

CFPB Supervisory Highlights Provide Guidance on Deficiency Balances and Rebates

How SNAAC, Turner Acceptance Are Tackling Tech Integration Challenges [Webinar]

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Despite Improvement in May, ABS Credit Performance Likely to ‘Deteriorate,’ KBRA Says

Bianca Chan
June 18, 2019
Credit Performance, Risk

CFPB Supervisory Highlights Provide Guidance on Deficiency Balances and Rebates

Under Richard Cordray’s Consumer Finance Protection Bureau (CFPB), it was “compliance malpractice” not to take heed of the Bureau’s enforcement actions when determining how to comply with federal consumer finance laws. Both Acting Director Mick Mulvaney and current CFPB Director Kathy Kraninger have stated that the Bureau will no longer engage in such “regulation by enforcement.” While this change in position is […]

Peter Cockrell
June 18, 2019
Auto Finance Excellence, Compliance

Senators Urge Regulatory Oversight of AI to Prevent Discrimination

As auto lenders increasingly turn to technology like artificial intelligence to improve business practices, two senators are pressing regulators to ensure anti-discrimination laws keep up with the innovation. Sen. Elizabeth Warren (D-Mass.) and Doug Jones (D-Ala.) sent a letter to the leaders of the Consumer Financial Protection Bureau, Federal Reserve, Office of the Comptroller of […]

Nicole Casperson
June 17, 2019
Compliance, Risk

Extended-Term Contracts Lower Credit Quality in Bank of the West Securitization

Joey Pizzolato
June 17, 2019
Capital Markets

Decline in Used-Vehicle Inventory Dampens Dealer Sentiment

Used-car sales – a driver behind recent market strength – may slow as used-vehicle inventories shrink, according to Cox Automotive’s second-quarter Dealer Sentiment Index report published last week. “If market strength is being driven by used vehicles, can used-vehicle sales remain strong considering declining inventory?” Cox Auto Chief Economist Jonathan Smoke said in a statement. […]

Bianca Chan
June 17, 2019
Capital Markets, Risk

Santander’s Calling System Still Violates TCPA, Court Finds

Santander Consumer USA’s Aspect calling system will still be considered an automatic telephone dialing system under the Telephone Consumer Protection Act, according to a recent federal court decision. The motion to reconsider filed in U.S. District Court for the Northern District of Illinois was based on the premise that the definition of an autodialer changed […]

Joey Pizzolato
June 14, 2019
Compliance, Risk

Carvana Hits ABS Market With Second Transaction

Carvana is bringing $337.3 million in asset-backed securities to market in a deal that’s expected to close June 27, according to a presale report by Moody’s Investors Service issued this week. Carvana’s second deal of the year props up its ABS volume to $676.1 million just three months after the online used-vehicle retailer completed its […]

Nicole Casperson
June 14, 2019
Capital Markets

Online Retail Platform Shift Adds Prime Options With TD Auto, U.S. Bank

TD Auto and U.S. Bank are the latest auto lenders to sign on with Shift Technologies, an online car retail and financing platform, Co-Chief Executive Officer Toby Russell told Auto Finance News. The newest additions enable San Francisco-based Shift to offer consumers financing options across the credit spectrum. "To be totally transparent, a lot of […]

Bianca Chan
June 14, 2019
Innovation & Mobility, Operations

Tech Partnerships Help Drive Digital Transformation in Auto Finance

Aclaro, a company that develops tools for companies in the automotive industry, recently announced game-changing news that validates its mission of helping small, scrappy dealerships compete with larger competitors. As part of its efforts to deliver five-star service for its clients, Aclaro joined the Microsoft Partner Network, allowing the company to continue building its business […]

How Lenders Should Leverage the Power and Promise of Artificial Intelligence

Technology does not wait for rules or regulations. Artificial intelligence (AI) is no exception. The potential profit associated with fintech speeds up innovation, but it also increases the risk of implementing machine intelligence without assessing potential hazards. Simply put, we do not understand how some machines solve problems with deep learning algorithms. This risk can […]

How to Leverage Current Machine Learning and AI Tools in Auto Lending

Auto dealers have heard the hype about how machine learning (ML) and artificial intelligence (AI) are going to transform their businesses. Typically, there are usually two binary outcomes that are discussed. On one hand, the promise of the future seems so bright. Instead of relying on intuition and gut feeling, many divisions of their businesses […]

The Value of User Experience When Managing Risk

Much has been written about the rise of machine learning and artificial intelligence and how it will impact the auto lending industry. While there has been a significant amount of hype, the promise of artificial intelligence is simply game changing. The most obvious application is that thinking machines will be able to assess risk and […]

The Benefits of Artificial Intelligence in Auto Lending

We are inundated with discussion about how new technologies promise to change the way that we do business and live our lives. Yes, many of these proclamations offer rhetorical flourish and grand visions. That said, there are new technologies available and startups that are maximizing these technologies to transform the auto industry — even today. […]

How Lenders’ Response Time Influences Dealer Relationships

Automotive OEMs rate vehicle performance by the time it takes to go from zero to 60 in seconds. This is a measure of energy conversion – fuel, spark, movement. While this is a mechanical situation, a comparison can be made to business response times. While fuel is a potential auto loan customer, the spark is […]

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