Listen: Weekly Wrap on new records set

Last week was marked by records as supply improved , ATP hit a record high in November, and dealer sentiment fell to its lowest point since the pandemic. Deep subprime loan terms fell to an 8-year low while dealer sentiment reached its lowest point since the start of pandemic. Meanwhile, rental companies are stepping up their remarketing activity in a return to normalcy. In this episode of the Weekly Wrap, Associate Editor Riley Wolfbauer discusses last week’s top stories, and what is to come in the week ahead. Subscribe to The Roadmap Podcast on iTunes , Spotify , or download the episode. Video Transcript: Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Riley Wolfbauer 0:00 Hello everyone and welcome to the roadmap from auto finance news since 1996, the nation's leading newsletter on automotive lending and leasing. It is Tuesday, December 20. And I'm Riley Wolfbauer. This is our weekly wrap on what happened in auto finance for the week ending December 16 2022. In general news, US core inflation slowed last week with the consumer price index from the Labor Department posting its smallest monthly growth in more than a year. Excluding food and energy the index rose point 2% In November, and it was up 6% from last year. The overall CPI increased point 1% From October and was up 7.1% year over year. The slowdown of inflation led the Federal Reserve to announce a half point interest rate increase last Wednesday, bringing the benchmark rate to a 4.25% to 4.5% range, the highest level since 2007. The decision follows four consecutive 75 basis point hikes policymakers project rates to end next year at 5.1%. In automotive news, new vehicle day supply reached its highest level since March 2021. In November supply for new vehicles ticked up to 53 days in November, an increase of three days sequentially according to Cox automotive day supplies up 77% compared with November 2021. by another measure total supply of unsold new vehicles in the US came in at 1.6 4 million units at the end of November, a 5.8% increase month over month and up 81% year over year. Despite improving supply new vehicle average transaction prices continue to rise, reaching record high in November. The ATP for new vehicles ticked up point 9% sequentially to $48,681, surpassing August's record high of $48,301. According to Kelley Blue Book, the increase in prices is primarily driven by a larger mix of high priced models and luxury vehicles controlling market share. Meanwhile, mobility platform driveaway Holdings has expanded its car subscription services to Canada and a partnership with Guelph Ontario based lease Here Pay Here dealership Legacy Auto Credit legacy works with consumers who face credit challenges such as bankruptcy, and who may not be approved for vehicle financing elsewhere by providing in house leasing and financing options for customers. Customers that legacy auto credit now have the option to open a monthly vehicle subscription with the drive it away partnership. In auto finance lenders tightened their underwriting standards in preparation for recessionary economic conditions as deep subprime loan terms fell to an eight year low in October, while loan balances also dipped. weighted average loan terms across deep subprime transactions fell to 66.8 months in October, marking the lowest average term length since before 2015. The weighted average initial loan balance for deep subprime borrowers fell to $19,202 as of October a decline of 1% compared with the same period in 2019. Deep subprime loans were the only credit segment to see a decline in loan balances since 2019. Additionally, annualized net losses increase across prime and non prime auto asset back securities transactions in November, prime net losses ticked up 2.41% An increase of eight basis points. month over month according to CRO bond rating agency, November auto loan index the rate of prime loans 60 plus days past due increase one basis point month over month 2.39%. Non prime losses climbed 65 basis points month over month to 7.81% in November, while 60 Plus day delinquencies came in at 5.28%, up six basis points in the same reporting period. Last week, artificial intelligence based auto lender Lendbuzz closed a $135 million credit facility with regions bank to expand its consumer loan portfolio and floor plan offering to independent dealerships. The new facility allows lembas to do floorplan financing, which they started providing to independent dealers 18 months ago, Len buzz currently has about 100 dealers funding inventory through the lender. The credit line follows a $150 million term facility with JP Morgan Chase inked in November and a march acquisition of Massachusetts based floorplan lender shamrock finance. Meanwhile, dealer sentiment reached its lowest point since the start of the pandemic as auto dealers are primarily concerned with rising interest rates and deteriorating economic conditions. dealerships are now focused on whether consumers can afford vehicles which is a shift from the first two quarters of the year when inventory was their biggest challenge. The q4 2022 Cox automotive dealer Sentiment Index with which gathered data from 1040. franchised and independent dealers across the nation through online surveys declined for the sixth consecutive quarter to a score of 43. A decrease of six points sequentially and 17 points year over year. A reading on the index above 50 indicates dealers view the market view market conditions a strong while reading below 50 indicates dealers view the market as weak. Franchise dealers view the market to be stronger than independent dealers with franchise dealers having a score of 52 and independent dealers having a score of 40 on the index. That about does it for today's episode. Thanks 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 dotnet in here next time.

Listen: Weekly Wrap on new records set

A discussion of the top stories for the week ended Dec. 16

EV subscription platform Autonomy expands to Texas

Wells Fargo Auto to pay $1.3B in CFPB settlement

Related Posts

GM Financial President: Used EVs ‘going to gain traction’

Affinity FCU leans into auto refinance as competition increases

‘Synthetic fraud is rampant’: Agentic AI, social media empowers auto scams

Beige Book: Higher car, gas prices contribute to mixed sales performance

Wells Fargo Auto to pay $1.3B in CFPB settlement

Stay Informed with Our Newsletters

The Roadmap Podcast

SPONSORED

Why credit unions give dealers an edge in today’s auto market

Driving better decision-making across auto finance operations with SAS

Auto finance’s first line of defense: Raising the standard in integrated software partnerships and data strategy

Retrieve your password