Auto Finance News | The News That Drives the Industry

Credit Performance

Federal Reserve amends stress test model for auto loan losses

KBRA Withdraws Ratings as Honor Finance Securitization Winds Down

Auto Outstandings Grow 30% YOY at 5 Largest Credit Unions

Federal Reserve amends stress test model for auto loan losses

The Federal Reserve has changed the way it calculates estimated auto loan losses in the 2019 Dodd-Frank Act stress test, according to the Supervisory Stress Test Results published last week. Specifically, the Federal Reserve enhanced the probability of default component and the loss-given default component. The report notes that these adjustments change the way certain […]

KBRA Withdraws Ratings as Honor Finance Securitization Winds Down

Honor Finance’s 2016 securitization has been withdrawn from Kroll Bond Rating Agency’s surveillance after being paid in full, the rating agency announced this week. The transaction had suffered two downgrades since July 2018, a month before the defunct company transferred its servicing to Westlake Portfolio Management. On June 17, servicer Westlake Portfolio Management exercised its […]

Auto Outstandings Grow 30% YOY at 5 Largest Credit Unions

Auto outstandings at the nation’s five largest credit unions increased year over year, totaling $32.5 billion last year compared with $25.2 billion in 2017, according to Big Wheels Auto Finance Data 2019. No. 1-ranked Navy Federal Credit Union notched a 9.1% increase last year in its auto portfolio, to $13.8 billion. Among the nation’s top […]

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Capital Markets

Subprime loan losses decline in prime securitizations

Fresh data from DBRS shows that subprime loans securitized with mostly prime issuance outperform subprime loans in mostly subprime securitizations, according to the rating agency’s Figures on Automotive Securitization Tapes (FAST) report published last week. An issuer’s ABS transaction is categorized as a prime or subprime shelf based on the weighted-average Fico of each securitized […]

Auto ABS heats up with $4.7B of issuance

Credit Acceptance stock closes in on $500 per share

Japanese auto lender heats up ABS market with $468m issuance

Auto issuance drives ABS growth

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From Auto Finance Excellence

Fraud analytics, alt-data reduce risk for nonprime lenders

CFPB outlines auto finance plans

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Nissan dealership fined $2.8M for loan defaults

A federal judge has allowed Nissan Motor Acceptance Corp. to repossess 90 vehicles valued at $2.8 million from a dealership the captive sued for defaulting on loans and selling vehicles out of trust. Helena, Mont.-based Robert Allen Nissan received loans from NMAC to purchase new and used vehicles for its inventory. Under the terms of […]

Nicole Casperson
July 15, 2019
Risk

Subprime loan losses decline in prime securitizations

Bianca Chan
July 15, 2019
Capital Markets

Off-lease volume to peak this year

The volume of off-lease vehicles returning to market is expected to peak at 4.1 million this year and again in 2020, Jonathan Smoke, Cox Automotive’s chief economist, said in the second-quarter Used Vehicle Value Index conference call. “Off-lease maturities grew by 1.7 million units between 2014 and 2018,” Smoke said. “This year, we expect the […]

Joey Pizzolato
July 15, 2019
Sales & Marketing

Wells Fargo settles TCPA claims with $18M payout

Regulators have approved Wells Fargo’s $17.85 million deal to settle lawsuits accusing the bank of violating the Telephone Consumer Protection Act, a law designed by Congress to protect consumers from receiving unwanted communications without prior consent. Wells Fargo has agreed to pay a nationwide class of 440,000 consumers who claim they received automated calls from […]

Nicole Casperson
July 12, 2019
Compliance

Bart Reagor fights back against Ford Credit

Bart Reagor, former co-owner of Reagor-Dykes Auto Group, is fighting back against Ford Credit Co. in the court of public opinion, which has resulted in a delay of a final judgment, Wayne Dolcefino, founder of Dolcefino Consulting, told Auto Finance News. The case — which has been postponed until Oct. 7 — will move to […]

Joey Pizzolato
July 12, 2019
Risk

Lenders likely to withstand threat of aging vehicles, analysts say

The average vehicle age in the U.S. continues to climb, yet lenders have little to worry about, analysts said. The average age of light vehicles in operation has risen to 11.8 years, thanks to better technology and overall vehicle quality improvements, Mark Seng, director of IHS Markit‘s global automotive aftermarket practice, said in a press […]

Bianca Chan
July 12, 2019
Sales & Marketing

Auto ABS heats up with $4.7B of issuance

A handful of prime and subprime securitizers pumped up ABS volume this week, bringing $4.7 billion of loans and leases to market, according to presale reports from S&P Global Ratings. Auto ABS volume totaled $61.3 billion as of July 8, up 12.7% year over year, according to data from JPMorgan Securities. On the prime side, […]

Nicole Casperson
July 11, 2019
Capital Markets

Credit Acceptance stock closes in on $500 per share

In Credit Acceptance Corp.’s first day of trading on June 5, 1992, the stock closed at $2.71 per share. Fast forward 17 years, and the subprime lender’s stock price is nearing the $500-per-share mark. In its first decade of trading, CAC’s stock averaged $11.43 per share. It crossed the $20 mark in 1995 and the […]

Marcie Belles
July 11, 2019
Capital Markets

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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