Podcast: ‘Weekly Wrap’ on underwriting themes at AFS East 2024 

Amanda Harris 0:23
Hello everyone and welcome to the roadmap from auto Finance News since 1996, the nations leading newsletter on automotive lending and leasing. . It is Monday, May 13th, and I’m Amanda Harris, joined by our new social editors James Van Bramer and Ashley Savage. . This is our weekly wrap and what happened in auto finance for the week ending May 10th, 2024 and Automotive and economic news. . The Biden administration will quadruple tariffs on Chinese magic vehicles and increase levies for other key industries. . This week. . The total tariff on Chinese EV, the rise to 102.5% from 27.5%, while others will double or triple and targeted industries. . Chinese EV S were virtually locked out of the US market years ago by existing tariffs and powersports, news retailer Rumble on finance and insurance revenue declined 5.8% sequentially in under 1% year over year to 25.8 million, while new vehicle retail sales inched up .6% year over year to about 10,500 vehicles and used retail sales declined 13.4% year over year to about 5000 units. . The company has curbed inventory to match needs and plans to open its first pre owned vehicle center in July and Autofinance AI based lending platform upstart S auto originations fell 71% year over year in the first quarter to $13 million, flat with Q 42023 volume. . The number of auto finance contracts came in at 526 in Q1 compared with more than 2000 a year ago, and the financier held $316 million in auto loans on its balance sheet, which was down 21% year over year. . The declines come as upstart emphasized profitability and better quality credit quality while automating about 90% of its loans. . During the quarter, we also just hosted auto finance Summit E 2024 and continued coverage of show trans. . Last week, technology was a big focus, with GM Financial sharing that the captive leans on AI integration for key areas, including revenue generation, customer experience and efficiency. . Several auto lenders also shared that they have had to adjust their underwriting strategies in 2023 to account for worsening credit performance across loans originated in 2021 and 2022, a theme prevalent during the summit. . Members, just that its credit model to account for changes in consumer borrowing metrics and new areas as the lender expands. . And while the model matures, defaults typically double cheap executive Amitay Kalmar said during a panel discussion at the summit. . Avid acceptance, too has made some changes. . Changes you have the details there, so don’t you take it away. .
James Van Bramer 3:00
Thank you, Amanda. . Avid Acceptance has expanded it into its lower credit tiers. . After originations plummeted 80% in 2023 amid a focus on higher quality applications to financial officer Curtis Ash said during a panel at the summit. . In other news, American Honda CPO sales growth outpaced the industry at 16%. . Dan Rodriguez, senior manager, senior manager of Auto Remarketing and fleet operations at American Honda, set at the Summit America American Honda is also urging dealerships to tap into CPO leasing to boost their sales and consumer loyalty. . Ashley, you had some interesting coverage from the show last week as well. . What were the highlights?
Ashley Savage 3:42
Yes, Sir. . I as you both kind of touched on in our coverage this week, we continue to cover some trends we picked up on a AFS and Nashville with one of those being subprime consumers and what financing options exist for them. . You know, we had multiple speakers that talked on a panel at AFS that talked about their desire to better serve these subprime consumers while also addressing the risk that comes with that and how they can better do that, which we see a similar conversation coming from Jonathan Lum with credit acceptance who also spoke at AFS and his efforts to expand, you know, which financing options there are and how how companies can create more financing options that are mutually beneficial to the lender, the dealer and the consumer. . There are obviously headwinds that play here from risk management to pricing pressures, and I think it’ll be interesting, excuse me, to see how each of these companies, the ones that I mentioned and also the others as well will continue to navigate credit tiers and how they can serve them in different ways while also supporting growth internally. . Amanda Harris 4:36
Yeah, definitely a theme. . There was growth, but responsible growth, right?
Like having to tap into the subprime market but knowing that interest rates and inflationary pressures are definitely going to continue to be a challenge for the industry. . So I’m sure we’ll keep hearing about those kind of trends as we cover more banks and credit unions and the industry as a whole over the next few weeks and months and leading into our show in October. . So we’ll keep an eye on that. . All right. .
Well, that about does it for today’s episode. . We will see you online at autofinancenews.net and here next time.