Podcast: Wildfires spark deferral offers; funding off to strong 2025 

Amanda Harris 0:16 Hello everyone and welcome to the road map from auto Finance News. Since 1996, the nation’s leading newsletter on automotive lending and leasing. It’s Monday, January 13th. 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 January 10th, 2025.
Last week brought a look at how the California wildfires are impacting the automotive industry, funding news and a look at how sales trends trended at the end of 2024. So I’ll turn it over to James and Ashley for those updates. James, take it away. James Van Bramer 0:50 Thank you so much, Amanda. I want to start by offering my deepest prayers and thoughts that go out to anyone who may be affected by the awful tragedy happening in Southern California. I do pray for a quick and speedy recovery for this lovely, lovely city. While this particular wildfire is heartbreaking and damaging to state, has had frequent battles with this destructive weather event. As of January 9th, California has already had 92 wildfires this year, burning through over 29,000 acres, according to California’s Department of Forest. Forestry and Fire Protection. Unfortunately, this has had a negative impact on insurance costs, though the impact is greater with property insurance, it has added effect. It has had an impact on auto. The average annual cost of car insurance in California has risen just under 48% year over year as of. December 2024 to about $22,575 per full year. Full coverage insurance. This is according to the latest data from Insurify, an insurance comparison company. The on the flip side, the average annual cost for full coverage car insurance in the US rose only 15% in December to about $2300. Other factors have definitely contributed to the insurance cost rising, but weather events such as these wildfires have certainly had been a piece of the puzzle to an extent. Some insurers have actually fled the state altogether, as has been the case in Florida, which has. Frequent, frequent battles with hurricanes. Since these insurers see very little profitability path towards profitability in the state, which in turn also drives up the cost of insurance. On the other hand, whether events tend to not have a significant impact on the auto market at large, this would be pricing, financing, inventory dictate tent and not have a super large impact, which is on the more positive side. The two sort of exceptions to that rule.
Our Hurricanes Harvey and Katrina and part of that is because they did affect us a larger, you know, area they had a, for example, Katrina unfortunately affected almost the entire state of Louisiana.
So that’s partly why it had a little bit of a more of an impact as some other recent weather events.
Also on the good on the good side when weather events do occur, lenders tend to offer loan deferrals and at the time of our publication of our article Toyota Financial Services.
For example, and across all its brands already had begun offering loan deferrals to affected people in the area. So once again, you know prayers out to them.
But this unfortunately does have an impact on the auto industry as well. Before I go, I did also want to mention the strong Q4 sales numbers that rolled out last week.
We saw growth nearly across the board and year end sales ended up outpacing most expectations from analysts who cover the industry, which ended up being around 16,000,000 sales.
It’s a new car sales, which is about a 2 1/2 percent or so rise. In 2023, EVs were a key factor which are which are been rising at a healthy rate. And Ashley, I know you have more on that.
So we’ll take it away. Ashley Savage 4:04 Thanks James. Yeah, sticking with that latest sales Roundup, we saw EV sales increase across most automakers in the fourth quarter. General Motors EV sales rose 125% year over year at 43,982 units, reporting the largest increase among the automakers in Q4. Ford Motor Co’s EV sales jumped 22.3% year over year to 77,258 units, while EV sales at Lucid Motors Rivian and Tesla Rose year over year by 78.7%, 1.5% and 2.3% respectively in Q4, limited deliveries totaled 3099 units, while Rivian sold 14,183 units and Tesla moved 471,930 units. Now that we’ve gone over a bit of number soup, we can kind of chat about what we might see for EV sales through the first bit of 2025. And talking to sources last week, it seems electric vehicle sales. Are positioned to surge in the first half of 2025, given that many consumers are looking to buy ahead of. Potential changes to EV tax credits under incoming President Donald Trump’s administration. The conversation I had with EV life’s Peter Glenn, he said. If we’re putting, if we’re betting on what’s going to happen, we have to take the Trump administration afterward and the leadership that’s been appointed because saying they want to get rid of the leasing credit, the new EV tax credit and the used EV tax Credit, Glenn highlighted that. A lot of these sales happened immediately following the election, signalling a sugar rush of EV sales in Q4 by folks who think tax credits might not be around. For the foreseeable future and want to take advantage of them. I also spoke with Moody’s Michael Brisson last week and he shared similar thoughts for the start of the year, noting that the uncertainty on the future of EV incentives in the latter half of the year could. Push total new vehicle sales higher in Q1, potentially outpacing historical sales patterns for the period. We definitely plan to keep a close eye on the events surrounding EV tax incentives, especially as companies like Glenn’s EV Life plan to lean into educating consumers on state and local. Incentives. And at states like California, come up with new programs, some of which could potentially exclude Tesla, following an elimination of the existing tax credit. Much to see there, but before I get back to Amanda, I’m going to turn to the power sports sector for a quick update. To start, power sports lender octane lending is expecting double digit origination growth in its RV and Marine segment in 2025.
The New York based lender’s optimism for 2025 comes after wrapping up 2024 with a 127.5 million asset backed securitization. Issuance on December 19th, backed entirely by recreational vehicle and marine loans, which was the first of its kind for octane octane’s President and CFO Steven Fernald told us that the lender felt that based on the size and hand with over 100 million in assets, that it. Was a good time to begin an ABS platform exclusively focused on RV and marine.
Meanwhile, powersports lender Thunder Rd. Financial is eyeing multiple forward flow agreements in 2025 amid larger efforts to revamp its funding strategy and increase origination volume.
In a chat I had with President and chief Executive Donald Homer junior, he said the lender’s biggest limitation on the volume of loans it could do has always been the amount that they can flow off and sell to other institutions going forward.
Thunder Rd. is looking to broaden its base of forward flow investors to drive origination volume to meet capacity and demand.
In 2025, the Thunder Rd. is looking at all investor types in hopes to establish up to 100 million across multiple agreement.
That’s all I have on the powersports front, so I’ll toss it back to Amanda for other key updates.
From the week? Great.
Amanda Harris 7:35
Thank you, Ashley and James for those updates. First in Automotive News, the share of one to five year old used cars priced at under $20,000 reached 20% year to date through November, which is up about 3 percentage points year over year and most of those vehicles within that price and age group are.
Financed by banks and credit unions. That’s a trend that will kind of keep a close eye on as things go forward this year.
And automotive finance, the Manheim used Vehicle value index ticked up .4% Percent year over year in December to 204.8, which is down .3% month over month. Prices did fall across all segments, with EV prices down nearly 8% year over year. Lenders funding activities also off to a strong start in 2025 with several issuing acid backed securitization deals. Lendbuzz’s issued its first auto ABS deal of the year, joining a wave of transactions during the first two weeks. Southern Auto Finance Company also secured a $100 million warehouse facility with Deutsche Bank. And extended its facility with Capital One and next year capital expanded its flexible floor plan pricing program to include vehicles purchased outside of Manheim Auctions in order to meet dealer demand. The program allows dealers to defer costs until the vehicle sold or the loan matures. Meanwhile, Nissan Motor Acceptance Company is nearing the completion of integrating a new loan and lease receivable system that will allow the captive more flexibility and finance offers and consolidate separate loan and lease systems into one. To come this week, it’s a dive into finance and insurance profits, and then an uptick in auto refinance. They kick off a bank, earnings and more data updates. We’re also excited to host a free webinar titled Tapping Aftermarket Products to improve dealer relations and profitability tomorrow at 11:00 AM Eastern Time, which will be hosted by yours truly and you can visit our website to learn more and register to attend. Registration is also open for auto finance Summit E taking place May 12 through 14th in Nashville, so be sure to check that out and get registered. And those are some highlights for the past week and I will do it for today’s episode. Thanks for joining us on the roadmap. Be sure to follow us on X and LinkedIn and we will see you online at autofinancenews.net and here next time.