Amid increased vehicle values, a rise in vehicle repossessions and continued tariff-induced uncertainty, Auto and powersports players are implementing new leadership, positioning themselves for growth and weighing incentives to weather macroeconomic challenges.
Prices for every major vehicle segment except compact cars saw a year-over-year increase in May, according to Cox Automotive data published June 6. EV values and used-vehicle values may be normalizing after a pre-tariff purchase surge, according to Jeremy Robb, senior director of economic and industry insights at Cox Auto.
The rate of 30-day plus auto delinquencies fell 18 basis points YoY in the first quarter, according to an Experian report released June 5. Auto inventory also fell in the regions covered by the Federal Reserve banks of Philadelphia and Cleveland, prompting higher prices, according to the Fed’s June 4 edition of the Beige Book.
National repossession assignments reached 2.1 million year to date through April, though lenders are delaying filing repossession papers.
In the nonprime space, lenders are looking at using AI technologies and speeding funding time while preparing to slow their activity in the wake of tariffs, according to panelists at the Non-Prime Auto Financing Conference on June 4 and 5, respectively.
Amid supply chain concerns and tariff-induced market uncertainty, captives are meeting with their OEM partners and deciding whether to keep incentives they began in response to the tariffs.
Meanwhile, powersports lender Ironhorse Funding, which funds more than $20 million per month in originations, is seeking over $120 million in forward-flow commitments.
In the marine world, dealers have reported a rise in repower, or boat engine replacement sales.
In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends in affordability and powersports for the week ended June 6.
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Editor’s note: This transcript has been generated by software and is being presented as is. Some transcription errors may remain.
Amanda Harris 0:22 Hello everyone and welcome to the road map from auto Finance News. Since 1996, the nation’s leading newsletter and automotive lending and leasing. It’s Monday, June 9th. And I’m Amanda Harris. This is with you. Wrap on what happened in auto finance for the week ending June 6, 2025. First, I like to thank our sponsor for this week’s podcast data scan. Now I’ll turn it over to Aidan. In truth, to share their top takeaways from last week. Truth. Why don’t you kick us off?Truth Headlam 0:48 Thanks, Amanda. Repossession assignments hit 2.1 million through April across the country, according to data provided to AFN by Vaughn Clemmons, the President of the American Recovery Association. This represented a 50% increase of the 1.4 million assignments reported through March of 2024, and at the end of 2024, assignments sat at 9.8 million. That was up from the 8.9 million a year prior. And 2.7 million vehicles were repossessed in 2024, up from 2020 threes 2.4 million repossessions. While repossession numbers are up, it is not where it was expected to be. Clemmons told us that conversations he recently had with lenders revealed that some lenders are holding off on filing repossession paperwork in an effort to keep consumers and their vehicles longer. On the credit front, experience Q 12025 state of the automotive finance market report was released on June 5th. That revealed that the rate of the 30 plus day delinquencies has dropped 18 basis points. Ance year over year average interest rates for both new and used vehicles also dropped. Used vehicles saw a 49 basis point drop. While new vehicle saw a 12 basis point drop year over year. Loan amounts and the new and used markets jumped used vehicle amounts climbed 0.3% to 2000 to $26,144.00 and new vehicle amounts climbed 2.7% to $41,720. Monthly payments, however, dropped .6% for used vehicles in Q1 and averaged 521 dollars, while new vehicle payments rose 1.1% from the first quarter of 2024 to 745 dollars. And the Federal Reserve’s most recent edition of Beige Book, released June 4th. Several dealers in the Cleveland and Philadelphia regions reported inflated prices as inventory shrunk. As a result. Dealers in Cleveland will start to pull back on promotions. Dealers in the New York region also mentioned depleted inventory following a modest uptick in sales. The latest edition of Beige, which reflects data collected on or before May 23 Aidan Bush 4:43 Thank you. So one area of interest I focused on was just how captives and their manufacturing partners were responding to some of that continued macroeconomic uncertainty we’ve talked about. So we saw President Donald Trump hike steel and aluminum tariffs up to 50% on June 4th, which is up from that previous import tariff of 25%.And what we heard from captive panellists at auto finance Summit E was that captives were working with their OEM partners. To retain market share and sort of balance tightening their belt with implementing new financing programs to attract customers, captives were also looking at whether or not to renew some of their tariff spurred incentives. So manufacturers like Ford Motor Company and Stellantis originally offered employee pricing discounts for all. Customers through June 2nd in wake of the tariffs, June 2nd has since come and gone, but they have both since extended that offer through July 7 for Ford and the end of June. For Stellantis and others, like Hyundai Motor Company, are weighing whether it’s time to increase prices on US vehicles. So there was a Bloomberg report that Hyundai was considering a 1% price hike on all US vehicles. Though we spoke with Michael Stewart at Hyundai and he confirmed to us last week that there at least wasn’t any final decisions yet. So last week I attended the nonprime auto financing conference in Texas where sub and nonprime lenders really laid out a focus on investing in tech to weather some of those tariff induced storms. So for example, bridgecrest, which is a subsidiary of Drivetime automotive group and a subprime lender, was actually working with drive time to put, quote, real terms online on every car for customers, according to Bridgecrest chief executive, Mary Lee Phillips. She also mentioned that Bridgecrest itself is prioritizing self-service when you can’t get self-service to prioritizing 2 way text and online chat tools over calling their customers. And when you do have to call, they’re trying to streamline their advisor tools so that way you know customer support. Goes as fast as possible.
In the 2025 non prime Auto Finance survey, we saw sort of a mirror of that focus on tech and efficiency. So one major kind of piece from the survey, I want to point out.
Is so this survey takes about 20 lenders or more and ask them about general sentiment as well as a handful of what they saw in 2020. Four of those lenders surveyed, 64%, said their average origination funding time has fallen to less than 25 hours. In comparison, in 2019, the pre pandemic average was 89.7 hours. So it’s a pretty significant change there. A lot of lenders attributed that to an increase in E contracting. And some of those digital products we mentioned and really one other thing I just wanted to point out was as far as general sentiment. Lenders in the nonprime space were optimistic. Around 70% of respondents of that survey believed origination volume will increase up to 25% year over year in 2025, and they accredited that to potential credit policy changes, new dealership agreements and changes to pricing. That’s about all I have, so I’ll kick it over to you, Amanda. Amanda Harris 8:15
Great. Thank you. Truth and Aidan and Aidan. It’s good to see that you had a great time at the non prime Auto Finance conference. So we’ll send you back next year. First of all, next looking back at last week on economic news. Non farm payrolls increased 139,000 in May after combined 95,000 in downward revisions during the prior two months, the unemployment rate was one is 4.2%. Excuse me used vehicle values ticked down sequentially but were up 4% year over year in May. Values continue to be up about 5% year over year in the first week of June, with EV values up about 3.5% year over year. During that same time frame. Bank of America actually revised its estimate for EV penetration of new car sales by 2028 to 14%. This is down from about 25% in 2027 and estimates they shared a year ago. Fewer electric vehicle offerings. An uptick in hybrid penetration and uncertainty surrounding EV tax credit It’s contributed to the bank lowering its estimates, which call for EV penetration to land at about 8% this year, which is down from last year’s projection of 15%. There have also been several staffing updates in recent weeks. Wells Fargo named a new head of Auto, Kevin Reen, who has held several roles at Wells Fargo since joining the bank in 2020. Tanya Sanders, former head of Wells Fargo Auto, was promoted to chief administrative officer of consumer lending.
Chase Auto today also named Michael Cattone General manager leading the bank. Subaru Motors Finance private label captive business. He reports to John Thacker, who was recently named president of private label captive plus finance. Earlier this month, Hyundai Capital America named Jim Drotman as President and chief executive, succeeding Marcelo Brutti. Fabian Thierry also Left Bank of America and became head of home equity at Citizens Bank. Lots of movements there in our space and I’m sure there will be more.
We will report on all of those in powersports. Ironhorse funding is seeing forward flow seeking, excuse me for flow arrangements, largely with credit unions, but also with banks and other lenders. The powersports lender wants to grow its origination volume from about $20 million per month currently to about $50 million per month, but they do.
Need more funding to do so? RV manufacturer Thor Industries also reported its fiscal third quarter earnings, showing a 3.4% year over year uptick in promotional liabilities. While net sales rose 3.3% year over year, North American shipments increased and backlogs declined in marine repower sales or boat engine replacements is on the rise as people opt to keep their boats longer and be offered to episode.
Thank you again for data scan for sponsoring this episode. Their new risk gauge solution allows financers to tap real time analytics and avoid missing red flags between audits. Thank you for joining us on the road map and be sure to follow us on X and LinkedIn and we will see you online at auto finance. News net and here next time.