Listen: Weekly Wrap discussion on retailers, EVs

Each of the major automotive retailers recorded year-over-year increases in finance and insurance (F&I) revenue in the third quarter amid strong penetration rates. Asbury Automotive recorded the largest YoY jump at 99% while Sonic Automotive recorded the smallest increase of 1%. New-vehicle sales climbed YoY at Asbury, Group 1 Automotive , Lithia Motors , Penske Automotive and Sonic Automotive, while AutoNation recorded a decline. In electric vehicle (EV) financing, EV lender Tenet is looking to expand into vehicle charger financing after securing a $10 million revolving warehouse facility with NY Green Bank . The deal comes on the heels of Tenet’s $20 million line of credit with Silicon Valley Bank established in October. Additionally, powersports lender Octane announced last week it is expanding into EV financing through a partnership with electric motorcycle manufacturer UBCO . UBCO dealers will have access to Octane’s digital financing tools and competitive rates. In this episode of the Weekly Wrap, Deputy Editor Amanda Harris and Associate Editor Riley Wolfbauer discuss the week’s top stories, and what to expect in the week ahead. Subscribe to The Roadmap Podcast on iTunes , Spotify , or download the episode. Editor’s note: This episode is sponsored by McGlinchey . Video Transcript: Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Amanda Harris 0:14 Hello everyone and welcome to the roadmap from Auto Finance News. It's 1996, the nation's leading newsletter on automotive lending and leasing. It is Monday, November 21. And then Amanda Harris joined by Riley Wolfbauer. This is our weekly wrap on what happened in auto finance for the week ending November 18 2022, and then thank you McGlinchey for sponsoring this episode. In general auto news Carvana cut 1500 jobs last week, which accounted for 8% of the company's workforce, as the used car market is continuing to slow down. Chief Executive Officer Ernest Garcia told staff that the layoffs were part of a broader effort to reduce costs, along with the cuts Carvana will be closing some of his locations. Capital One also started layoffs last week and its auto division. It was not disclosed how many employees were laid off, but it was a small portion of a 3300 associates who work in the lenders audit division. The lenders auto originations fell 24.8% year over year and 19.7% sequentially in the third quarter as a result of an intentional pullback on auto lending in the second quarter. Capital One's affected employees were given eight weeks notice and will be able to apply for open positions within the larger bank. Team members not hired into internal roles will also be available for 16 weeks of severance pay, and the bank will provide six months of medical insurance retraining assistance and outplacement services. The spokesperson told us in auto finance six major automotive retailers tally year over year increases in finance and insurance revenue in the third quarter amid strong penetration rates and high average vehicle prices. Asbury Automotive recorded the largest year over year drop of 99% while Sonic Automotive recorded this halls increase of 1%. When looking at new vehicle sales, the results were almost all positive across the board as AutoNation was the only retailer to record a year over year decrease in sales at 4.7% as we recorded the largest year of your increase at 47% year over year. Additionally new vehicle inventory was up year over year all six retailers allow us supply was mixed. Turning to electric vehicle financing news Evie lender startup tenant secured a $10 million revolving warehouse facility with New York Green Bank and a plan to increase origination volume and expand into vehicle charging financing. The facility can be increased by an additional $15 million in capital depending on tenant success. The new facility follows a lenders October $20 million line of credit with Silicon Valley Bank. Meanwhile, powersports lender octane announced last week it is now expanding into EB financing through a partnership with electric motorcycle manufacturer of CO this latest expansion falls lender launching tractor trailer and recreational vehicle financing in the past year. Octane rapid growth also helped them surpass $1 billion in originations for the year back in October. Rally you also covered a couple of things this week average transaction prices, we have some trends there and some news on repossessions from used car week in San Diego last week. Can you touch on some of those?Riley Wolfbauer 3:22 Yeah, so starting with average transaction prices, they rose in October following a decrease in September, this new rise in October. It was a point 2% increase sequentially and a 3.8% increase year over year and inched up towards the record high that was set in August. In August, the record high was set at $48,301. And then this October number came in just $20 behind that number. So it crept back up towards that record high. And so we're not really seeing much of a change in average transaction prices, despite them dropping a little bit last month. And as we thought we saw demand decreasing, we thought we'd see lower transaction prices, as OEMs are trying to get consumers into their vehicles. But clearly that's not the case at the moment. And so conversely, US vehicle values dropped in October according to the Mannheim us vehicle index. So that means that new new vehicle consumers are still willing to pay these high transaction prices. While consumers looking at the US market. Demand is falling off in the US market because consumers in that tier or lower credit tier, they don't want to pay as much so that's why we see values drop in the US market but haven't seen it yet in the new and then over to the repossession agencies. While I was that used car week. In San Diego they had track on repossession MCs, so they had a lot of sessions with forwarders repo agents, collection people from lenders talk on the stage. And one of the biggest things that I heard was that repossession agencies, there's 30% of repo agencies shut down nationally due to unprofitability. They didn't give a timeline of when this 30% is compared to, by using context, I believe they were talking about compared to before the pandemic. And it's also expected that there is 13% fewer licensed repossession companies, and 22% fewer agents picking up vehicles in California. So as we see delinquencies starting to rise and the potential for more repossessed vehicles, as we have these macro economic concerns here, one of the biggest concerns in repossession is that there won't be enough agents to pick up those vehicles. And if there aren't agents to pick up the vehicles, then lenders are stuck in limbo, not knowing where their assets that are not being able to get recovered. So it'll be interesting to see over the next few months as all these if we see the expected increase come in how repossession agents will be able to react to that as we go into 2023. And then looking ahead to what our coverage will be after the holiday, we are going to go to press for our December issue of the magazine. And we will be focusing on our Executive of the Year and executives to watch for 2023.Amanda Harris 6:49 Great, that's a fun feature. So we're excited to to announce who those executives are and nice profile pieces on all of them. So make sure you check out the December issue. That's coming and great recap there from last week. And I hope everyone has a great holiday week this week. But that about does it for today's episode. Thank you for joining us on the red roadmap, please be sure to follow us on Twitter and LinkedIn. And we will see you online auto finance news dotnet and here next time

Listen: Weekly Wrap discussion on retailers, EVs

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