Volvo Sticks to Finance Strategy Amid EV Push

Volvo Cars became the first automaker to commit to producing a full line of electric or hybrid vehicles by 2019 last July, but this plan is not prompting a shift in the OEM’s financing strategy. “We see no difference in how we approach electrified cars from our finance company perspective,” a company spokesman told Auto […]
  • William Hoffman
  • October 4, 2017

Truck-Dense Portfolios Face Heightened Loss Severity as Values Decline

MIAMI — Truck loans and leases could impact recovery losses for lenders if those assets depreciate rapidly, John Bella, a managing director at Fitch Ratings Inc., told Auto Finance News. For years, lenders have accumulated a larger concentration of SUV and truck assets in their portfolios as low gas prices kept consumers in larger vehicles […]
  • William Hoffman
  • September 28, 2017

Residual Values Will Pressure Losses Through 2019, Analysts Say

MIAMI — Auto ABS losses are on the rise due to the abundance of off-lease vehicles coming back into the market, and that trend is likely to continue into 2020, analysts from Moody’s Investor Service told Auto Finance News. “So far this year we have bumped up our expected losses for several shelves, including Ally […]
  • William Hoffman
  • September 18, 2017

Auto ABS Issuers Pull Pools Back From Harvey, Irma Impacted Areas

During one of the busiest times for the secondary market, auto lenders are excluding vehicles affected by Hurricane Harvey from ABS issuances over fears of negative-equity deals, according to presale reports.   Exeter Finance Corp., Fifth Third Bank Dealer Financial Services, Ford Motor Credit Co., and Santander Consumer USA have all removed vehicles from their […]
  • William Hoffman
  • September 12, 2017

Competition Revs Up in Floorplan Lending, as Sales Show Signs of Tempering

The partnership between a dealer and a floorplan lender is “very relationship-based, and very emotional,” said Brian Fallon, senior vice president of commercial lending services at General Motors Financial Co. First-, second-, and even third-generation dealers could stay with a floorplan lender for 20 to 30 or more years,” he added. “Obviously, we’ve had cycles […]
  • Larissa Padden
  • June 29, 2017

Fitch: 2015 Losses on Track for Record High

Fitch Ratings found that “2015 is the weakest vintage” of securitized loans, performing even worse than loans made during the 2007 financial crisis, according to the rating agency’s Auto ABS Index report released the month. Extended loan terms and continued used-car depreciation are the main drivers of the poor performance, which Fitch predicts will reach […]
  • Huixin Deng
  • June 20, 2017

Auto Delinquencies Climb, Despite Low Unemployment

Historically, there has been a “very high correlation” between auto delinquencies and the unemployment rate, yet, today unemployment is the lowest it’s been in a decade while delinquencies have climbed to levels not seen since the financial crisis, Hylton Heard, senior director in Fitch Ratings’ U.S. ABS group, told Auto Finance News. “A lot of […]
  • William Hoffman
  • May 12, 2017

Credit Erosion: Cracks Are Starting to Show in Subprime Auto

Fitch Ratings reported subprime delinquencies hit a 20-year high in March, and some of the smaller lenders in the space have cut back on originations, stopped issuing securitizations, or shuttered their doors completely, multiple sources told Auto Finance News. The number of new players entering the space has “slowed down,” Nathan Benson, chief executive of […]
  • William Hoffman
  • April 21, 2017

Smaller ABS Issuers Likely to Get ‘Picked Off’ in Mergers, Fitch Says

Given the delinquency and loss rates in the subprime auto securitization market, and the level of competition, it’s “surprising” there haven’t been more mergers and acquisitions lately, said Hylton Heard, analyst and senior director of Fitch Ratings’ U.S. ABS group. “Clearly, if auto sales decline this year, as we expect they will marginally, and if […]
  • William Hoffman
  • March 22, 2017

Subprime ABS Delinquencies Spike to 20-Year High, Fitch Says

Subprime ABS delinquencies at least 60 days past due reached a peak that hasn’t been observed in two decades, according to data from Fitch Ratings.  ABS subprime delinquencies grew 11.6% in February compared to the prior year, to a high of 5.16%, a rate not reached since October 1996 when it peaked at 5.96%. Even […]
  • William Hoffman
  • March 16, 2017
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