Top auto finance stories in 2020: Impacts of a pandemic
The COVID-19 pandemic has been the prevailing issue affecting all auto lenders’ decisions and performance in 2020, halting manufacturing production and prompting months-long payment deferral programs for consumers and dealers.
Here are our top five stories in 2020:
Drop in demand spurs Honda, BMW production halts
American Honda and BMW AG were forced to suspend manufacturing production in multiple countries in March due to a pandemic-induced drop in demand. Production woes continued to plague the auto industry for months amid rising COVID-19 cases, prompting inventory concerns still felt at yearend.
Ally Financial offers COVID relief
Ally Financial, which manages an auto lending portfolio of more than $80 million, offered payment deferrals and other assistance to its dealer and consumer customers during the pandemic. Since March, multiple auto lenders have offered payment deferral programs for consumers, and many continue to work with customers on a case-by-case basis.
COVID drives demand for auto finance regulation
At the height of the pandemic, troubling levels of debt, record delinquencies and “abusive practices by lenders in the market,” prompted U.S. Senate leaders to seek action by the Consumer Financial Protection Bureau. One concern was that consumers were being harmed by interest accrued over the life of a payment extension.
Nissan joins others in pandemic aid efforts
Nissan Motor Co. and its captive, Nissan Motor Acceptance Corp., joined other auto lenders in March to help consumers through payment extensions on loans and leases. Franklin, Tenn.-based NMAC was the ninth-largest auto lender in 2019 with $44.7 billion in outstandings, according to Big Wheels Auto Finance Data.
Toyota Financial brings floorplan relief
Toyota Financial Services in March launched relief options for current and new dealer customers negatively impacted by the pandemic, including reducing rates on floorplan lines. Captives propped up their dealer partners in 2020 during widespread shutdowns, and subsequent losses, caused by COVID-19.
