Podcast: Used-car demand strong amid tight credit, rising DQs 

Amanda Harris 0:21 Hello everyone and welcome to the road map from auto Finance News. . Since 1996, the nation’s leading newsletter and automotive lending and leasing. . It’s Monday, September 16th. .
And I’m Amanda Harris, joined by Ashley Savas and James Van Bramer. .
This is our weekly wrap on what happened in auto finance for the week ending September 13th, 2024. . In economic news, the core consumption index, which excludes food and energy costs, increased .3% month over month in August and rose 3.2% year over. . Year according to the latest Bureau of Labor Statistics for quick Power Sports update, the RV Industry Association expects year in wholesale shipments to land. . Of between 311,600 units and 336,600 units lower than estimates from earlier this year. . RV wholesale shipments in 2025 are projected to land between about 330,000 and 363,000 units. .
North American RV registrations fell year over year in July, while wholesale shipments increased. .
Shipments rose 17.5% year over year to just over 24,000 units. . While July RV registration. 9% year over year to nearly 36,000 units, according to latest data from BMO in Automotive Finance. . Automakers are eyeing certified pre owned vehicle programs for electric vehicles as EVs made-up more than 8% of new vehicle sales in the second quarter. . Honda, for one, plans to add battery electric vehicles to its robust CPO program down the line as supply of used E vs grows. . How to best sell used Ev’s is something automakers must consider as EV shared growth. . We also have several compliance updates. . Last week, the Consumer Financial Protection Bureau fined TD Bank $28 million for allegedly sharing inaccurate information about customers to consumer credit reporting companies. . Asbury Automotive has also filed a response to a complaint from the Federal Trade Commission that the dealership group engaged in deceptive after market product sales practices, known as payment packing at 3 Texas dealerships. .
Asbury said that the FTC did not provide specific evidence. . Support its allegations and did not respond to a request from Asbury for a list of complaints made against a group. . The case will go to trial unless the settlement is reached. .
We also have several updates on the used vehicle market and James has details. . So James, take it away. .
James Van Bramer 2:45 Thank you, Amanda. . As I report out, a feature story on the used vehicle market, which please stay tuned and look out for I put out some stories about what I’ve learned so far. . We have seen you supply become a little bit hard to come by with lease returns being down and the effects of the supply. . Supply chain shortage that led to fewer vehicles being made now coming into the used vehicle market and of course, the fact that you just cannot create a used vehicle. . Still, we have seen great demand in the used vehicles space with the turnover rate remaining above 8%. . As one of my sources put it, used vehicles are still flying off of dealers lots. . This is important because franchise dealers in particular are really reliant on us of vehicle sales. . For example, one dealership I recently spoke to does about 30% of their total sales in the used vehicle market. . They are particularly reliant on lease off leases to build up that used vehicle supply and keep an as the main Ave. for their used vehicles. . But as off. . Leases have declined. . They’ve had to rely on other avenues for keeping their used vehicle supply to the level that they would like it to be at. . I will have a feature story on this and much more coming. . Shortly, so please stay tuned for what I think and hope will be a really great story for you all to read. . That’s all I know, but we did also see that credit access also worsened in August, along with delinquencies. . I will turn it over to Ashley with more details on that. . Ashley Savage 4:21 Thanks, James. . As you mentioned, last week we covered the latest updates on delinquencies and credit credit availability. . Excuse me. . On the delinquency side, short term delinquencies increased in the second quarter as consumers continue to grapple with inflationary pressures that we’ve kind of seen across the market. . This performance is likely to stabilize depending on the rate cut decisions that are coming by the Federal Reserve this week. . The percentage of auto loans more than 30 days past due jumped 16 basis points year over year to 2.88% in Q2. . According to Experian, the increase in delinquencies comes after some some lenders, such as Allied Financial, took Carter hits on auto loans and others in the second quarter. . Online financial was preparing for some underperformance in its retail auto loan book after credit challenges intensified in Q2. . The lenders borrowers are struggling more recently with a weakening employment picture. . Paired with the ongoing high inflation and cost of living headwinds that we see for some time. . The increase in delinquency levels in Q2 was expected and continues to weigh on lender portfolios. . Delinquencies are likely to level out soon. . The theme seems to be that those delinquencies are rising. . They are not rising as quickly as they were before, which is obviously good. . That being said, more lenders seem optimistic about auto. . About the auto market delinquencies and the kind of their appetite for auto loans, despite the fact that credit tightened across most lender types in August. . Charlotte, NC, being based truest bank, is leaning into auto, leaning into indirect auto lending. . Excuse me, overall, consumer health is strong. . Their chief executive, Bill Rogers, said, noting that consumers are showing good savings, FICO scores and debt to income ratios. . New York based lender Citigroup at the conference also noted that pulling delinquencies in the consumer. . Things like that have wanted to more stabling stabilize performance down the line, Chief Financial Officer Mark Mason said. . Delinquencies obviously have picked up, but those are starting to Crest over the last quarter or so. . I meant some consumers continue to be pressured by inflation and high interest rates, some of that being said, it seems that there are so concerns happening in the market. . There is definitely a little bit of a light at the end of the tunnel, whether it’s, you know, in. . The coming terms or it’s earlier into next year? Those are likely to happen, hopefully sooner rather than later. . That’s what I’ve got for credit unavailability, so I’ll toss it back to Amanda for closing comments. . Amanda Harris 6:39 Great. . Thank you, James and Ashley and I will do it for today’s episode. . As a reminder, registration is open for the 2024 Auto Finance Summit and Powersports Finance Summit. . Returning to Vegas in October and more information can be found at auto finance dot live. . Thank you for joining us on the road map and be sure to follow us on X and LinkedIn and we will see you online at autofinancenews.net in here next time.