Listen: Weekly Wrap discussion on Q3 earnings close, AFS

Last week, third-quarter earnings began wrapping up and coverage from the Auto Finance Summit continued, with Capital One Auto Finance , Carvana and Credit Acceptance Corp. (CAC) reporting results. Performance was split, according to the companies’ earnings documents. Capital One and Carvana saw originations fall 28% year over year and 15% YoY, respectively, while CAC consumer loan assignments increased 32% YoY. Meanwhile, coverage continued from the Auto Finance Summit, with operational updates from Arivo Acceptance , CarMax Auto Finance , Consumer Portfolio Services , GM Financial and U.S. Bank on digital initiatives and new partnerships. In this episode of the Weekly Wrap, Editor Joey Pizzolato 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. Joey Pizzolato 0:01 Hello everyone and welcome to the roadmap from auto finance news since 1996, and the nation's leading newsletter on automotive lending and leasing. It is Monday, November 7, and I'm Joey Pizzolato, joined by Riley Wolfbauer. This is our weekly wrap on what happened in auto finance for the weekend in November 4 2022. Thanks to our partners and McGlinchey for sponsoring this episode. In general economic news. Federal Reserve officials last Wednesday delivered their fourth straight 75 basis point interest rate, while at the same time hinting that future rate hikes can be less severe. The Federal Open Market Committee is set to meet once more this year next month. Speaking of interest rates, car loans are approaching a 14 year high. According to Edmunds the average annual percentage rate on New Car Loans was 6.3% last month, the highest since April 2019. Interest rates were as high as 8% in 2017. average amount financed towards a new vehicle purchase last month was up 27% to just over $40,000, an increase from nearly $32,000 in April 2019. Also last week, third quarter earnings began their two week clothes, with Capital One Credit Acceptance Corp and Carvana reporting mixed results. Capital One's Auto originations declined 19.7% sequentially in 20.4% year over year to 8.3 billion. Still auto outstanding has increased 6.5% year over year to 79 point 6 billion. Capital One chief executive Richard Fairbanks said the bank continued to pull back on auto loan production in response to quote competitive pricing dynamics. Carvana posted a similar story with originations falling 15% year over year to 1.7 billion, largely due to a decline in retail sales.The industry also had a major staffing shuffle last week, Ford credit chief financial officer treasurer and Executive Vice President of Strategy Brian Schaaf is retiring following a 33 year career at Ford Motor Company and the captive. Eliane Okamura will succeed chef immediately upon his retirement, effective December 1. According to afford credit, Amanda Sat Sat down with Chef for an exclusive exit interview, so be on the lookout for that later this week. Also, last week, Riley you reported on incentive spending forecast through 2023 and a key transaction with open lending. So what's going on there? Riley Wolfbauer 2:42 Yeah, so as far as incentive spend, obviously, we all know that incentive spend has been down because of supply chain shortages shortages on new vehicles. So there hasn't really been much since the beginning of the pandemic as far as incentives. Incentive incentives currently sit around 2%. But JD Power expects them to stable like increase a little bit, but stay below 5% Still through the second half of 2023. Currently, the average spending per vehicle is anticipated to reach $882 in October, which that's a 44.7% year over year decline from last year. So obviously incentive spend is still way down as expected just to go up just a little bit. And it's not really expected or in the near future for incentive span to reach the pre COVID levels that we saw around I believe it was 10 to 11%. And then over to open lendings new transaction. They partnered with America first credit union America first credit union is already in prime and near Prime Lending. But the partnership with open lending allows them to expand their credit box into subprime lending. So for those that don't know, open lending insures loans up to 80% of the losses for credit unions or any financial institution that they are in partnership with. America first credit union is based in Ogden, Utah, and they are currently the seventh largest credit union in terms of assets in the US with a total of $17.7 billion. And they also ranked fifth in the US and membership at 1.3 million members. So they're a pretty large credit union that open lending is partnering with open lending is already with access bank, affinity credit union and Randolph books federal credit union among other automotive OEMs. Joey Pizzolato 4:53 Thanks, Riley, um, you know, we'll have an analysis of open lendings earnings tomorrow, but it certainly sounds like you know, the subprime sector is going to see increased sort of competition in the market as more of these prime and near prime lenders sort of try try to expand their credit box and further down the spectrum. So we'll we'll have, like I said an analysis on their earnings tomorrow. Also this week shift room rumble on Lucid Motors and Rivian. Automotive will report quarterly results as third quarter earnings come to a close. That about does it for today's episode. Our November issue of the magazine is out with coverage from the auto finance Excellence Awards and continued coverage from the auto finance Summit, so be sure to check that out. Thank you for joining us on the roadmap. Be sure to follow us on Twitter and LinkedIn and we will see you online at auto finance news.net in here next time.

Listen: Weekly Wrap discussion on Q3 earnings close, AFS

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