Podcast: Used-vehicle prices rise, EV financing share up 

Amanda Harris 0:19 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, December 9th now. 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 December 6th, 2024. We’re going to kick off today with a few key updates on the automotive finance industry. New data painted a picture of a robust EV market headed into the end of the year, and James has the details there. So James, take it away. James Van Bramer 0:48 Thank you, Amanda. Last week, we received November sales report for multiple major Oem’s, which all pointed to an overall year over year sales growth for all who reported, driven by EV sales. This is now the second month in a row of of EV sales, helping drive strong sales reports as. A result total sales. Across all models were estimated at 1.4 million units, up nearly 7%, according to a recent report by JD Power on the strength of that made-up 10.1%. Total new vehicle financing in the third quarter up nearly 31% year over year or about 2.4 percentage points according to experience, Q3 state of the market, Auto Finance, auto finance market report released last week in Q 312.7% of EVs were purchased with cash. That’s a sharp drop from last year, which was at 24.6%. That is partly why EV financing has grown so significantly, and in that vein, Evy leasing climb to 45% compared to 25% last year. So that is partly where that strength of EV financing is coming from is the leasing. On that note, the share of new financing for Isheracles had hit 74%, which fell about four point 75% year over year. Obviously that is partly because of that increase in the EV financing. One final note that I would like to share is that auto auto dealers told me last week that they would like more E contracted deals from their lending partners as one dealer put it right now, E contracting is more important than it’ll ever be a year from now. If a financial institution doesn’t have an option with E contracting, they are years behind. As we know, many lenders have worked to speed up funding and will continue and we will continue to track that into next year. But that’s it for me for now, Ashley. Also dived into a few updates in the powersports market. I actually wanted to get away. Ashley Savage 2:50 Thanks James. Last week, Canadian powersports manufacturer BR PS North American retail sales declined 11% year over year in the third quarter of fiscal 2025. Given softer demand and larger efforts to reduce year in shipment excluding snowmobiles. North American retail sales fell by 7% year over year, with declines in nearly every product segment, including side by side. All terrain, three wheel and pontoon sales. Personal watercraft sales, however, increased slightly in the quarter with that vrp total revenue also. And in Q3, landing near 1.4 billion in the quarter, down 18% year over year, but up 6.2% compared with Q2. The sales and revenue declines were driven in part by the manufacturers effort to reduce overall network inventory levels, which were. Down 10% year to date in Q3 and on track to the desired desired decline of 15% to 20% at year end. Also in the manufacturers, third quarter came the decision to scale back on portions of its marine businesses, which was reclassified as discontinued operations. In last week’s earning supplement the decision, BRP says, given the current dynamic in the marine market, will spur improved margins and additional cash flow for its core powersports business. That being said, Brps announcement highlights ongoing challenges that we’ve seen in the marine space. Other lenders we’ve spoken to suggest pricing improvements in the marine space are lagging in lagging the RV space by nearly a year and pacing behind the broader powersport sector. Last week, I spoke with specialty lender Source, One Financial services President and chief executive Michael Updoll, and he shared that the real driver in consumer hesitancy remains the marine market’s stickiness on high pricing, something that he says is not really the case on the RV side, the. We ran on this kind of digs into why there is a pricing lag, but he added that in the meantime, lenders ability to offer simple digital financing capabilities will be key to bringing consumers back to the market as demand returns in 2025. Pending rate cuts by. The Federal Reserve and improved pricing. Until then, though, I know we’ll be keeping an eye on pricing and how lenders are approaching these headwinds, but I’ll now hand it back over to Amanda for some of the other key updates on the industry. Amanda Harris 4:58 Thank you, Ashley and James. First I want to do some little bit of economic news. So applications for us unemployment benefits rose by 9000 to 224,000 for the week ended November 30th. Us employers announced nearly 58,000 job cuts in November of 27% year over year and non farm payrolls increased by 227,000 in November after rising by 36,000 in October. The unemployment rate went up to 4.2%. And automotive Finance TD Bank is investing in technology for anti money laundering compliance following a $3 billion fine in October from AUS Department of Justice related to allegations of money laundering. TD Auto finances portfolio ticked up 1% year over year in Q4 to 30.9 billion and the Toronto based Bank still plans to pull back in commercial auto lending on the heels of the fine wholesale used vehicle prices increased on a year over year basis. For the first time since August 2022 with the Manheim used vehicle. Index up .2% year over year and 1.3% month over month in November at 205.4. High car prices have contributed to affordability pressures for consumers. For incentives are helping drive sales. The latest addition of the Federal Reserve’s Beige Book, citing data collected on or before November 22nd, highlights pockets where sales activity has rebounded with incentives, while inventory continues to build. And the regions covered by the Chicago, New York and New Hampshire federal banks sales increased in large part due to incentives. Dealerships across several Federal Reserve Bank regions reported higher inventory levels and consumers holding on to vehicles longer, which is spurring a rise in demand for maintenance. So there are some of the highlights from this past week and that will do it for today’s episode. 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 and here next time.