Auto Finance Summit 2025 shed light on how auto lenders are responding to challenges facing the wider market, including credit performance, affordability and evolving technologies.
Following subprime buy here, pay here lender Tricolor’s Sept. 10 Chapter 7 bankruptcy filing, auto asset-backed securities spreads widened, Kayvan Darouian, director of consumer asset-backed securities research at Deutsche Bank, said during an Oct. 15 presentation at the event. Still, Tricolor’s challenges do not represent issues facing the wider market, he said.
Further, subprime share has “come back in the last 12 months,” and lenders should be competitive in the near prime sector, Scot Hensel, finance director at Kunes Auto Group, said during a fireside chat at the summit.
Auto lenders are also leaning into AI and technology to drive efficiencies. GM Financial, for example, is piloting a digital app for dealers to manage their businesses and track information such as deal volume and floorplan balance, President and Chief Executive Susan Sheffield said during a fireside chat.
Meanwhile, third-quarter bank earnings so far point to growth in auto originations and improved credit performance. Ally Financial’s auto originations rose 24.5% year over year to $11.7 billion, while Wells Fargo Auto’s originations soared 114.6% YoY to $8.8 billion. Bank of America’s net charge-offs across its direct and indirect consumer portfolio also decreased 1 basis point YoY to 0.2%.
Listen as Auto Finance News Editor Amanda Harris and Associate Editor Aidan Bush dive into the top stories from Auto Finance Summit 2025 and highlight key takeaways from third-quarter bank earnings.
Stay up to date on all the news coming out of Auto Finance Summit 2025 here.
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Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain.
Hello everyone and welcome to The Road Map from Auto Finance News. Since 1996, the nation’s leading newsletter in automotive lending and leasing. It is Monday, October 20th and I’m Amanda Harris. First, I’d like to thank our sponsor for this week’s podcast, The Work Number by Equifax. Last week we hosted Auto Finance Summit 2025 in Las Vegas, and much of the talk centered around navigating affordability concerns, still strong consumer demand and the use of A I and automation to improve processes and customer experience. On the technology front, GM Financial is piloting a digital app for dealers to manage their businesses and track information such as deal volume and floor plan balance, President and Chief Executive Susan Sheffield said during a fireside chat at the event. Other lenders also mentioned the use of A I to improve collections and servicing, better communicate with consumers, and allow team members to focus on manual tasks that are more complicated and require human touch. Overall, the sentiment was largely positive across the board, with many pointing to a strong economy, a competitive landscape, and. Resiliency among lenders and consumers. Still, pockets of the market, mainly subprime, continue to face challenges when it comes to credit performance and recent bankruptcies. And for more on that, I’ll turn it over to Aidan. Aidan, take it away. Aidan Bush 1:44 Thank you so much. So yeah, as as Amanda mentioned, definitely a key take away at AFS was the current state of the subprime market. There was a presentation and in it I was mentioned that overall while subprime auto ABS performance is sound, there are some pockets of weakness. And namely, subprime auto ABS spreads widened in early October shortly after Tricolor Holdings Chapter 7 bankruptcy. And this trend really comes despite ABS spreads largely tightening since President Trump announced those auto tariffs back in April. And while Tricolor, the Texas-based subprime buy here, pay here, excuse me, retailer is unlikely to be a bellwether of the broader market, it still could be a sort of bad look for the industry was the way that it was mentioned and weakened consumer confidence. Auto lenders that also target the sort of niche that Tricolor targeted. So your thin to no credit file consumers, your consumers that hold I tins or are undocumented could face more scrutiny in the coming months as well. And another sort of quick mention of Tricolor in Fifth Third’s quarter three earnings released last week. And while they saw improved credit performance, they also faced a nearly 200 million provision expense associated with frauded tricolor. One other sort of, I would say tangential point, just zooming out for a bit of a more global perspective, Franz Reiner, Chairman of the Management Board at Mercedes-Benz Mobility AG. At AFS and mentioned that credit performance was fragile sort of globally across the entire financial services industry. He also outlined that there were a few different ways in which the different auto finance markets could learn from each other, namely in Asia, there’s a higher speed of execution, he said, where from credit applications. To sort of the cashing out process for dealers, transactions can take as few as 2 minutes. the United States he credited with creative product design and sort of the region of Europe. He mentioned more as far as risk management having sort of tighter risk standards there. So those were a few of the sort of major takeaways that AFS. I’m sure we’ll be going over more in the coming days and I will turn it back over to Amanda. Amanda Harris 3:57 Great. Thank you, Aiden. Yes, lots of great takeaways already from the show and we will have more coverage in the coming weeks. So make sure to stay tuned on the site. In other news, last week we also had large banks that reported third quarter earnings and so far they point to growth in auto originations and improved credit performance, both very positives of course for the industry. Going through them, Ally Financial’s auto originations rose 24.5% year over year to $11.7 billion after the bank received a record 4 million consumer applications. Auto loan and lease outstandings were at about 92.8 billion, up just over 1% year over year and 30 plus day delinquencies fell about 31 basis points year over year to 3.93%. Turning to Wells Fargo, Wells Fargo Auto’s originations soared 114.6% year over year to $8.8 billion, with leaders crediting the bank’s preferred financing deal with Volkswagen as contributing to that growth. Auto out standings also rose 7.5% year over year to $46 billion and on the credit performance front, 30 day delinquencies were at 1.54%, which was down 74 basis points year over year at Bank of America net charge offs across the bank’s direct and indirect consumer portfolio, which does include. Largely auto decreased about one basis point year over year to .2%. The bank did not break out auto originations, but the portfolio came in at $55.1 billion, which is up .4% year over year. Regional banks earnings also largely saw stagnant or slowed growth in auto, but there were. A few exceptions. Huntington Bank’s auto originations were up about 4% year-over-year to 2.5 billion, but on the other side, U.S. Bank’s indirect loan and lease originations declined 7.7% year-over-year to 1.7 billion. Delinquencies also improved at Truist and PNC Financial. This week, as we said, we’ll have continued coverage from Auto Finance Summit 2025 and we also have more earnings, so make sure to stay tuned on the site for all those key takeaways. And as always, thank you for joining us on the Roadmap. Be sure to follow us on X and LinkedIn.