Podcast: CFPB halted, Q4 earnings continue

Amanda Harris 0:15 Hello everyone and welcome to road map from auto Finance News. Since 1996, the nation’s leading newsletter and automotive lending and leasing.
It’s Monday, February 10th, and I’m Amanda Harris, joined by James Van Bramer and Ashley Savage. This is our weekly wrap on what happened in auto finance for the week ending February 7th, 2025. Last week, fourth quarter earnings continued with large auto retailers and Ford Credit. We also have some insight into trends in the power sports space following the AIM Expo trade. Show in Las Vegas. So I’ll go ahead and turn it over to James and Ashley for those updates, James.
James Van Bramer 0:48 Thank you so much, Amanda. So an in recent earnings reports, both aspiry automotive and Group One automotive showcase shop strong growth in finance and insurance profits, also known as F and I. Profits in Q 4/20/24, Asbury saw a 16% year over year increase in F and I revenue total. Just under 200 million while Group 1F and I revenue rose 20.5%. To about 225 million. Both companies also experienced strong sales gains in the quarter in both new and used vehicles. Speaking of sales, January’s vehicle sales showcased a mixed performance among major automakers, with EVs once again continuing their strong sales pace. This seasonally adjusted annual rate, or SAAR, estimates for the month range from about 15.6 million to 16.2 million units, give or take. Reflecting a slight dip from December 2024, which was a very strong sales month which had a pace of 17.1 million, but it still outpaced last January’s rate. While January is typically a slow sales month, there is certainly optimism for continued demand in 2025 fueled by pent up demand and consumer confidence, experts say. Notable sales performance included Honda and Hyundai, which saw significant year over year gains, while forward involve. See declines in January. EV sales, however, remained a standout once again with impressive double digit growth across all major across all major brands that did report EV sales, which included Honda, Ford and Toyota. Overall, there’s been a sense of optimism in the industry after the very strong close to 2024. So far it has continued in 2025. There remains to be seen how long that holds up and if it continues throughout 2025. That’s enough for me. Ashley. How was the trade show?
Ashley Savage 2:48 Thanks, James. As you mentioned, last week I had the pleasure of being at this year’s AIM Expo and trade show, which was held in Las Vegas.
As expected, the show came with opportunities to connect with some of our contacts in the powersports industry, which left me with a handful of updates on promo levels, motorcycle sales and what to expect in 2025 to start conversations at the event highlighted that the need for. Promotional offers in powersports could climb this year. If the Federal Reserve decides to hold rates at the current range or increase the rate. Which currently sits at 4.25% to 4.5% octane lending for one expects current incentive levels to persist through 2025 and does not forecast that incentives will be any less aggressive this year. Similarly, Jonathan Grey, principal product manager at Trader Interactive, noted that finance incentives will be key to sales this year, given that rates remain elevated, especially on private loans. Gray added. Quote anything to bring down that APR will get people on the showroom floor. Speaking of sales in a conversation with MP as Jim Woodruff at the event, he projected that motorcycle sales this year will likely be flat compared with 2024, depending on how potential headwinds such as tariffs play out in a worst case scenario.
He noted that interest rates would remain largely unchanged and tariffs proposed by President Donald Trump would disrupt the stabilizing market by increasing manufacturing costs for some OEMs. Just for context, motorcycle sales totaled 5 hundred, 581,000 units at year end 2024. Last year’s total was nearly 12% lower compared with the Motorcycle Industry Council’s 2023 reading, which indicated that motorcycle sales reached 600 and. 60,000 units at the time, Mulder added. Holistically, he doesn’t think the overall market will trend drastically one way or the other. Scott Yarbrough, senior analyst for motorcycles and powersports at Black Book, offered similar insight. He said the best case for motorcycle sales this year is to land a little better than last year. In his words, we’re heading into a turbulent era, not just with powersports, but with every market. With that, I’ll hand it back over to Amanda for some key updates from the past week. Amanda Harris 4:57 Great. Thank you. Ashley and James there were other several other recent updates this week regarding the operations of the Consumer Financial Protection Bureau. Former CFPB director was fired on February 1st and Donald Trump appointed Secretary of Treasury Scott Bessent as acting director, who immediately paused rulemaking and litigations at the agency over the weekend. Russell Vought, who heads the White House’s Office of Management and Budget, also ordered wider access for the Department of Government Efficiency. Led by Elon Musk to the CFBB on Saturday night votes and e-mail instructing employees to stop supervision and examination activity, I’ve chatted with lawyers whose practices include consumer lending and auto finance, and the consensus is largely that any pending cases or litigation outside a steps that such as. Court trials. Things that are legally required to proceed are pause until further notice. It’s not yet clear how long the CFPB will be paused. And while it’s not abnormal for a pause to occur when an administration changes, we have seen that historically it is unusual for all supervisory activity to be halted. Something else to keep in mind, there are still laws in place that lenders have to follow. There are still state level laws and state level regulation that will be in place and the CFPB usually is backward looking. So depending on how things play out, we do have another administration that will come in in four years. No letters need to be. Keep in mind that there are still laws in place that they have to follow and they still should be following. At least what is known as of right now that they should be doing. But we’ll just keep an eye on what’s happening with the CFPB and what changes will come down the line. Last week also brought several updates in the auto industry. GM Financial resubmitted its application to form GM Financial Bank, which would be a Utah charted industrial bank. GM Financial initially submitted the bank application in December 2020. Before voluntarily withdrawing it in June 2024 to address feedback provided by the FDIC, GM Financial Bank plans to offer auto lending and deposits and complement the captive score. Businesses will be led by Bill Donnelly, who was formerly Chief Financial Officer of Fintech LendUp and has sesved As President and Tesla Finance for 2014 and 2017, we also published our latest feature, a deep dive into the rise of private credit and asset based finance, including auto lending. A large amount of available capital. Has spurred interest from private investors such as alternative asset managers and asset based lending and auto lenders looking to diversify their funding. Sources have established warehouse lines of credit and forward flow agreements in tandem with issuance in the asset based bank securitization market to come this week, we. Will have updates on floorplan lending trends. Additional earnings including Sonic Auto and Lithia Motors and more news in powersports. So the reminder registration is open for auto finance Summit E taking place May 12 through 14th in Nashville. To make sure you go online and register for our show, and there are some highlights from the past week and I will do it for today’s episode. Thanks for joining. Us on the road map. Be sure to follow us on X and LinkedIn and we will see you online at autofinancenews.net and here next time.