Autonomous Vehicles, Shrinking Car Ownership Threaten Traditional Auto Finance Model

FORT WORTH, Texas — As automobile manufacturers and mobility companies continue to experiment with autonomous vehicles and subscription services, the need for financing will likely diminish, said Tony Boutelle, president and chief executive of CU Direct.

For example, autonomous vehicles could remove the need for families to have multiple cars. “We think it’s going to have a downward impact to lending,” Boutelle told Auto Finance News. “[Consumers] might be able to finance some of these [autonomous] cars, but if they can afford them, they will probably be buying. For the most part, a lot of people will have an autonomous car come to their house and take them where they want to go.”

It will also depend on who is manufacturing and distributing these vehicles, as the franchise system is a “critical piece” because OEMs sell and finance through their franchises, Boutelle added.

“If Waymo, Uber, and Apple become the manufacturers and sellers of these cars, and there aren’t franchised dealerships anymore, how will that impact our capability to make loans?” For now, the timing and fallout are still to be determined. “It’s definitely going to happen,” Boutelle said. “It’s just a matter of when it’s going to happen, and what impact is it going to have on the industry.”