The auto asset-backed securitization market remains resilient as a funding outlet for many issuers and originators.
“It’s an important source of capital for us,” Michael Gustafson, chief financial officer at lender Arivo Acceptance, tells Auto Finance News. “The primary driver for us is getting critical mass and building up the portfolio to drive the right economics in securitization.”
West Valley City, Utah-based Arivo in July closed a $221 million transaction backed by nonprime and subprime auto loans, marking its first ABS deal of 2026 and seventh overall. The company had penciled in an ABS deal for late Q2, largely as a function of originations growth and freeing up capacity in its warehouse lines, Gustafson says.
Investors appear to be more selective compared with 2025 amid headwinds including consumer affordability, interest rates, inflation concerns and geopolitical uncertainty, he notes.
“That said, we saw robust demand across the capital stack,” Gustafson says, noting that new investors joined Arivo’s order book for the latest deal.
Arivo expects to be in the market a couple of times a year as it looks to expand its footprint and grow its portfolio. The lender historically has come to market one to two times per year.
“The more often we’re coming to market, we become even less sensitive to the timing. … You’re able to absorb some of the market volatility more easily because you’re repricing more frequently,” Gustafson says.
Credit characteristics of Arivo’s latest pool were in line with its previous issuance in July 2025, according to a July 20 Morningstar DBRS presale report:
- The number of loans in the pool was 6,782, compared with 7,331;
- The annual percentage rate was 19.6%, up from 19.32%;
- The original term was 72.19 months, up from 71.86 months;
- The loan-to-value ratio was 125.9%, up from 122.98%;
- The share of loans with no FICO was 5.5%, down from 6.14%.
In this podcast episode, Auto Finance News Associate Editor C.J. Moore and Gustafson discuss Arivo’s latest auto ABS deal, its tie in with Ken Garff Automotive Group, subprime consumer health, funding costs and more.
Subscribe to AFN’s podcast on iTunes or Spotify or download the episode.
Auto Finance Summit, the premier industry event for auto lending and leasing, returns October 5-7 at Caesars Palace Las Vegas, featuring executive insights from institutions including Chase Auto, Carvana, Capital One, Hyundai Capital America and Wells Fargo. To learn more about the 2026 event and register for early-bird pricing through Aug. 21, visit www.AutoFinance.live/AFS.
