Podcast: Pre-tariff car prices hold, Q1 earnings kick off

Credit access improved and vehicle prices were steady in March before tariffs took effect, while the first wave of first-quarter earnings point to growth for auto lenders. Auto loan approval rates and subprime share increased in March, contributing to improved credit access. Increased demand ahead of the tariff-induced price hikes led to a surge in vehicle sales in March, while Q1 bank earnings so far reflect strength in originations. CarMax Auto Finance Chase Auto and Wells Fargo Auto all saw year-over-year originations growth, with originations up 6%, 20.2% and 12.2%, respectively. However, ongoing economic uncertainty could affect lenders’ strategies. For example, CarMax announced it will shift its long-term growth timelines due to macroeconomic concerns. Meanwhile, a proposed Senate bill could make auto loan interest tax deductible for U.S.-made cars, but some legal experts say the bill’s language does not clearly define a U.S.-made vehicle. In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Associate Editor Aidan Bush discuss pre-tariff vehicle prices, credit access and earnings trends for the week ended April 11. Subscribe to “The Roadmap Podcast” on iTunes or Spotify or download the episode. Auto Finance Summit East 2025 is set for May 12-14 at the JW Marriott Nashville featuring fireside chats with Santander Consumer USA and Chase Auto. Visit autofinance.live for more information. Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Aidan Bush 0:18 Hello everyone and welcome to the road map from auto Finance News, the nation's leading newsletter on automotive lending and leasing since 1996. Today is Monday, April 14th. I'm Aidan Bush, joined by Amanda Harris. This is your weekly wrap up of key developments in auto finance for the week ending April 11th, 2025 as tariffs continue to shape the market and interesting trends stood out this week, new vehicle prices held steady and credit access improved. In March, just before the auto. Tariffs went into effect. For more on that, I'll hand it over to Amanda, who dive deep into the industry's pricing and credit trends. Amanda. Amanda Harris 0:53 Great. Thank you so much, Aidan. Yes. So prices and credit availability were positive for the industry at least in March, although we know long term tariff impacts are still yet known and price increases haven't yet been enacted across the board. Many manufacturers have opted to keep prices steady before tariffs kick in, largely to continue to get sales. And we saw this play out. March sales were very strong when it comes to average transaction prices, so new car average transaction. Price in March was up a little bit less than 1% year over year, but was down .2% month over month and as compared to a revised lower ATP for February coming in at around forty $747,400, Excuse Me Inc. Were at about 7% of Atp's in March, and that's up from 6.7% of atpa year ago and flat with levels in February. So largely seeing things pretty flat month over month. And a slight uptick across the board. Year over year tariff driven price increases are projected though to increase prices down the road, especially on those lower priced models. So in March, there were 26 models that had Atp's under $30,000, which represented about 14% of total US vehicle sales. And that's according to data from Kelley Blue Book. Many of those cars, which runs the gamut, there's Buick, Chevy, Honda, different models that are assembled outside of the US. So they are subject to those 25. Percent auto tariffs and if tariffs hold at that 25% level, prices are expected to rise between 10 and 15% in a few months on terror subjected vehicles and even prices on non tariff vehicles are projected to tick up at least 5%. And that's large. Due to manufacturers and dealers are likely going to spread those costs of the tariffs across their vehicle lineup, they're not likely to put. You know, 25% tariff on a particular model. They're going to take in those extra costs associated with the tariffs for their inventory and they're likely going to spread that across their business, just the cost of doing business. So it's going to mean that all vehicles are likely to see some type of uptick, but the expectation is you are going to see a larger price increase on those directly impacted vehicles. Electric vehicles also saw a slight rise in average transaction prices, up 7% year over year and 3.8% month over month to just over 59,000 in March. So we'll kind of have to wait and see how prices you know are adjusted in the coming months on credit availability. That also went up a little bit. The dealer track credit availability index went up 3% year over year and .5% month over month land. At 96.4, according to Cox Auto and all channels and litter types saw credit access loosen year over year, but eyes right now are on this larger macroeconomic conditions, tariffs and pricing and how that's going to impact credit performance down the road. It will take a little bit before we start to see, you know, delinquencies rise and all that as a result of the tariffs because prices have not yet gone up. But when they do and to you know, these higher levels being predicted that is going to impact consumers ability to pay and online, we will see a rise in delinquency. So more to come on that later this week. And with that, Aidan, I'll hand it back over to you. Aidan Bush 4:11 Yeah. So last week marked the beginning of earnings season for this quarter. So let's dive into that, starting with Chase, Chase Auto's loan and lease originations totaled $10.7 billion in quarter one, which was a 20.2% increase from about this time last year. According to the company's April 11 earnings call, higher lease Vol. Partly drove this growth, according to the Chief Financial Officer, Jeremy Barnum, who spoke during the earnings call. Wells Fargo's originations also grew in quarter one to $4.6 billion, up 12.2% from last year and credit performance improved for Wells Fargo with excuse me, with delinquencies, net charge offs and credit loss allowances all declining. In contrast, Chase Auto's credit performance slightly weakened from last year. However, tariffs continue to fuel market uncertainty in this instance, for example, CarMax Auto Finance, which also saw gains in its most recent quarter announced in April. 10th earnings call that it will shift its long term growth timelines due to macroeconomic uncertainty on the manufacturing side, General Motors and Ford shares downgraded in response to those 25% auto tariffs. Despite these headwinds, US inflation did cool in March, according to a Bloomberg report. In other news, a proposed Senate bill could make the interest on auto loans tax deductible. The bill, introduced by Senator Bernie Moreno of Ohio. Aims to make auto loan interest deductible on all US made cars. Though some legal experts were concerned that the bill's language does not clearly define AUS made vehicle. That should wrap up this week's episode. Thanks for joining us on the road map. Follow us on X and LinkedIn and visit autofinancenews.net for the latest updates. We'll see you next time.

Podcast: Pre-tariff car prices hold, Q1 earnings kick off

Listen as AFN editors break down top stories from past week

Dip in auto ABS contributes to weakened industry health (Big Wheels)

A ‘shame’: Powersports leaders weigh in on potential HDFS sale

Related Posts

CPS’ originations fall 12.3% in Q3

Vroom subsidiary UACC’s originations up 7%

Open Lending certified loans fall 13%

A ‘shame’: Powersports leaders weigh in on potential HDFS sale

Stay Informed with Our Newsletters

The Roadmap Podcast

SPONSORED

Driving Innovation in Automotive Refunds: How Onbe and Allied Solutions Are Modernizing the Payment Experience

Navigating the Margin Squeeze: EVs, Tariffs & Pricing — A Q&A with Earnix

Enhancing credit approaches to boost conversion and dealer loyalty

Welcome Back!

Retrieve your password