LAS VEGAS — Though the auto finance industry has vastly improved in the past year, it is not out of the woods yet. That was the sentiment expressed by senior executives from a host of finance companies during the opening sessions at the Auto Finance Summit yesterday.
Pricing in the capital markets has tightened tremendously, and asset-backed transactions for subordinate loan tranches are starting to get done. Meanwhile, estimates are ticking up for new-vehicle sales volume in 2010, and lenders are reaping dividends from beefed up risk-management efforts.
Still, financiers are feeling the effects of the credit crisis. Loss frequency and severity are still at near-record levels for some lenders, and steep unemployment will keep borrowers constrained. The key is to be flexible — and creative — when working with customers to keep them paying their loans.
