Features | Auto Finance News - Part 5

Appetite for Higher Yields Spurs Boost in Single-B Securitizations

Increasingly risky securitizations are becoming more popular as a looming contraction period has investors hungry for higher yields. Although single-B-rated loan tranches are described as “speculative” and “unlikely to survive even a mild deterioration in economic conditions,” rating stability and upgrades have made investors feel comfortable with this asset class, said Amy Martin, primary credit […]

Credit Unions Jockey for Marketshare

As used-car financing gains popularity and banks shy away from new-car loans, credit unions are jockeying for marketshare, partnering with service providers and teaming with other lenders to spark auto loan interest. “[Banks are] making a lot of moves that are making it easy for us,” Chris Whittaker, director of lending services at Oregon Community […]

Business Intelligence, Business Woes: Why Machine Learning is Causing Regulatory Concern

Toys ‘R’ Us plans to shutter all 200 of its physical stores after filing for bankruptcy, an indication to retailers of the changing landscape of consumers increasingly opting for online shopping and digital platforms. This shifting consumer mindset is not just affecting e-commerce, but also the auto finance industry — which appears to be on […]

Something has to Give: How Bloated Incentives are Harming the Industry

New vehicles are getting more expensive, but so far those price increases have done little to dissuade consumers from pulling the trigger on new-car purchases or leases because manufacturer incentives have been so generous. However, incentives and production could be taking a downturn as auto sales slow. Average incentive spending through February rose year over […]

Lenders Are ‘In Limbo’ Amid Potential Changes to CFPB Fair Lending Policies

  The battle over how the Consumer Financial Protection Bureau polices discrimination cases has long been one of the most contentious wars waged between the auto finance industry and its regulators. This battle had led to multi-million-dollar consent orders, has forced or persuaded several lenders to cap their dealer compensation rates, and has prompted at […]

Remodeling Residuals: As Autonomous Technology Matures, Will Today’s Cars Face A Steep Residual Drop?

There are currently about 1.4 billion cars on the road. By 2020, many of those cars — and eventually all, in the much longer term — are predicted to be replaced by self-driving vehicles. But in the transition to fully autonomous vehicles, a deluge of early semiautonomous iterations are expected to flood the used-car market […]

5 Ways Mobility Will Change the Secondary Market

New ownership and mobility models are popping up all over the auto finance space and that’s driving new innovations in the auto ABS market as well. As more and more consumers switch to fleet-focused mobility offerings, it’s forcing investors and issuers to think differently about the assets they are securitizing. For example, some believe issuers […]
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