Chase Auto Finance is sticking to its strategy and trusting that normalization will run its course, despite the fact that off-lease volume and its effect on used-car values is a stress point, Head of Retail Lending Bruce Jackson told Auto Finance News.
“Used-car prices coming down is really good news for the consumer, which will certainly have an impact on leasing,” Jackson said. “If new cars are more affordable, maybe leasing won’t be needed as much, which will naturally help with used-car values. All these iterations of things help with the entire macro industry.”
Rising delinquencies and losses are another area of stress for the market. However, Chase isn’t feeling pressure right now because it didn’t engage in layered risk, he said.
“The industry continued to increase its loan-to-value [ratios], it continued to increase term, and took on layered risk,” Jackson said. “We did not expand because we knew that would happen. We didn’t feel it was prudent heading into this part of the cycle to increase LTV, increase terms, and to take on the additional layered risk. It was more what we didn’t do than what we did.”
