Upstart auto originations soar 224%

AI-driven lending platform Upstart ’s auto originations soared 224% year over year in the fourth quarter amid improved liquidity and revamped underwriting processes. Upstart originated $43 million in auto loans in Q4, up 61% quarter over quarter, according to the fintech’s Feb. 11 earnings presentation. The San Mateo, Calif.-based firm originated 1,715 loans in Q4 compared with 542 in Q4 2023 and 1,080 in Q3. New underwriting models in auto retail and refinance contributed to the QoQ increase in originations and improved conversion rates, Chief Executive Dave Girouard said during the company’s Feb. 11 earnings call. Auto loans held on the balance sheet sat at $285 million, down 17% YoY and up 0.7% QoQ, according to the presentation. Upstart plans to reduce the volume of loans held on its balance sheet in 2025. Upstart did not break out auto-specific credit performance, but Girouard said the company has prioritized “direct collections efforts for borrowers at risk of default where they're most impactful” across all loan types. “Automating routine servicing while intensifying delinquency management has helped us reduce roll rates from one-day delinquent to charge-off by 15% year over year,” he said. Automation at 91% Across all loans on Upstart’s platform, 91% were fully automated in Q4 and 93% of instant approvals were converted to funded loans, according to the presentation. Upstart is eyeing increased automation across all loan types, Sanjay Datta , chief financial officer, said during the call, noting that challenges such as fraudulent activity make it hard to reach 100% automation. “A lot of what we're doing is applying some of the same techniques to the other products, not just the personal loan product,” he said. “There's a lot more wins to be had in automation and instant decisioning. It’s ultimately a fraction of how much we can attract true applicants, true borrowers to the platform versus the bad guys out there that we have to keep away, and that dynamic will always be there.” Auto refi grows Upstart is eyeing auto refinance growth in 2025, Girouard said. “The modest reductions in base interest rates has begun to revive the auto refinance opportunity, and we hope to take full advantage of it in 2025,” he said. “We're increasingly focused on auto refinance as an excellent cross-sell opportunity for our millions of prior borrowers.” The rate of conversion from a consumer requesting interest rate information to a funded auto refinance loan increased by seven times for the full year, according to the presentation. Funding strengthens Meanwhile, improved liquidity drove an increase in loan volume from bank and credit unions on Upstart’s platform in 2024, Girouard said. For the full year, Upstart added 28 banks and credit unions, according to the presentation. Upstart added Stellantis as its 11th certified digital retailing OEM in October, joining automakers including Audi , Acura , Honda , Kia , Lexus , Mercedes-Benz , Mitsubishi , Subaru of America , Toyota and Volkswagen , a company spokesperson previously told Auto Finance News . Dealerships integrate Upstart’s technology to allow consumers to search cars and compare payment options. The company also shored up its funding capacity during the year, Girouard said. “We saw increased commitments from our partners in private credit as well as a growing roster of lending partners active on our platform,” he said. “In Q4, we upsized commitments with long-standing capital partners, increasing these commitments by a total of $1.3 billion.” Shares of Upstart Holdings Inc. [Nasdaq: UPST] were trading at $88.77, up 31.8% as of market close today. Upstart has a market capitalization of $8.1 billion. 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. Early-bird registration is available here .

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