Negative Equity Risk Rises in Canada as Terms Lengthen, Refinancing Quickens

Long loan terms and more frequent refinancing have led to an increase in Canadian auto loans with negative equity, according to a Moody’s Investors Service report. Negative equity happens when a consumer owes more on a vehicle than it is worth. This situation can be exacerbated when customers buy new vehicles before completing their original […]

Senate Bill Gives Banks ‘Wiggle Room’ for Nonprime Lending, Economist Says

A bipartisan financial reform bill making its way through the Senate this week could allow midsize banks in the auto space to be more competitive with non-bank institutions, especially in the nonprime sector, said Michael Vogan, lead auto economist at Moody’s Analytics. Senate bill 2155, sponsored by Senate Banking Committee Chairman Mike Crapo (R-ID), would […]

Consumer Preferences May Pose ‘Prominent Threat’ to Residuals, Moody’s Says

Changing consumer preferences and new electric vehicle technology bear “prominent threats” for auto finance, in particular, due to residual values, Moody’s Investors Service said in a report Monday. In North America, customers have an increased preference for SUVs, partly attributable to low gas prices and good economic conditions. The sales mix of new SUVs and trucks […]

BMW’s First Loan Issuance in 2 Years Provides Portfolio Insights

BMW Financial Services issued its first North American securitization deal in two years, and the parameters of the transaction reflect the rising loan term environment seen across the industry. BMW’s 2018-A transaction backed by $1.4 billion in auto loans has the highest average loan term — 63 months — of any of its issuances dating […]

NMAC Sets Goal of 100% Auto-Decisioning, President Says

Nissan Motor Acceptance Corp. will invest “significant resources” in technology over the next few years — starting in 2018 — to allow the captive to be open 24/7, President Kevin Cullum told Auto Finance News. “Customer demand for online shopping and financing is really driving our businesses, and it’s vital that we invest in new […]

Moody’s Highlights Residual Value Concerns of Battery EVs

Residual values for battery-electric-vehicles (BEVs) remain an issue for the auto industry, particularly for auto lease-backed securities, according to a report from Moody’s Investors Service. Compared to internal-combustion-engine (ICE) vehicles, BEV cars suffer from higher residual uncertainty because of three primary reasons. The first is the lower predictability of BEVs’ value proposition compared to ICE vehicles. […]

NMAC’s Third ABS Shows Higher Fico, Longer Terms

Nissan Motor Acceptance Corp. closed its third ABS of 2017 yesterday, to the tune of $1.5 billion, and featured a higher Fico and longer loan terms than previous 2017 securitizations. The 2017-C securitization is backed by prime-quality retail installment auto loan contracts including a mix of prime receivables, backed by cars, crossover vehicles, sports utility […]
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