Major players in the auto and powersports industries continue to adapt to the rapidly changing macroeconomic environment teeming with the effects of tariffs and rising inflation. Where some see opportunity, others see indications of a challenging fiscal year.
As consumers continue to grapple with affordability, which has been further pressured by tariffs, auto refinancers see an opportunity as delinquencies rise. TransUnion’s Q1 2025 Credit Industry Insights Report shows the 60-plus day delinquency rate at 1.38%, the highest first-quarter peak since 2009 during the Great Recession.
As consumers search for ways to save on costs, PenFed Credit Union’s refinance applications are up 75%, according to Chris Kleczynski, vice president and head of auto lending product strategy.
Another tariff shakeup occurred last week after a federal court ruled President Donald Trump’s unilateral levies were unconstitutional, though an appeals court reversed the block within 24 hours.
With a backdrop of tariffs, consumer spending growth slowed, with personal spending up 0.1% in April compared to a 0.7% growth a month prior.
While some parts of the auto industry are experiencing upticks in sales and pricing in this uncertain environment, the powersports market is declining. Towable vehicle values dropped 9.3% year over year in April. Eric Lawrence, Black Book’s principal automotive analyst, said that the motorhome and towable market will likely experience further decline in the coming months.
Boat registrations fell 14% YoY in April, according to BMO Capital Markets, and Bombardier Recreational Products noted a drop in retail sales, both related to tariff shocks and uncertainty.
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 May 30.
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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 2nd, and I’m Amanda Harris. This is our weekly wrap on what happened in auto finance for the week ending May 30, 2025. First, I’d like to thank our sponsor for this week’s podcast DataScan. And with that, I’ll turn it over to Aidan and truth to share their top takeaways from last week, truth. Truth Headlam 0:51 Hi, Amanda. A recent TransUnion report showed that auto delinquencies reach their highest first quarter peak since 2009, shining a light on the financial pressures that consumers are facing. But that doesn’t present but that. I’m just gonna start that over. Thanks, Amanda. A recent Trans Union report showed that auto delinquencies reach their highest first quarter peak since 2009, shining a light on the financial pressures that consumers are facing. But that does present an opportunity for refinancers like PenFed Credit Union at the Auto finance summit east in Nashville, Tennessee PenFed’s vice president and head of auto lending product strategy Chris Kleczynsk. Named consumers based in delinquency. As one group of consumers who are likely to look for refinancing opportunities. Other people who may benefit from refinancing are those hoping to save through lower rates or term extensions, and people who have been or challenged credit histories. Lastly, originations rose 9.6% across the top 100 financers in 2024. Chase Auto, AutoNation Finance, Upstart and UACC all reported an uptick. In the first quarter of 2025, some lenders expect originations growth to continue after the pre tariff buying frenzy seen at the end of the first quarter spilled into April and May. Aidan. Aidan Bush 2:26 Yes, thank you. Truth. So I kind of focused more on the power sports world this past week and the take away I noticed was this sort of broader decline across both marine and RV segments. So in marine, both US retail boat registrations and auction conversion rates saw these double digit percent declines in May, signaling an end to the spring sales surge, which is usually typical across powersports, that traditional wisdom being that consumers purchase in March, April and May. To get out in the kind of warmer summer weather dealers and lenders mainly pointed to higher interest rates and tariff related concerns as some of the leading factors for those declines. And Matt Amata, who’s the vice president of national powersports Auctions, said June would be the sort of critical month to look at the rest of the year’s outlook in terms of sales. It’s important to note when I mentioned those kind of US retail boat registrations, that is every single segment. So all types of boats and the US retail market, according to BMO Capital Markets saw those double digit saw those declines. Similarly, we saw a downward trend in the motor home and towable space. So Black Book released its April report last week, which showed that towables dropped around 9% year over year and dropped around 5% from last month. That’s specifically their wholesale values. Dropping motorhomes also dipped down from the month before. But it should be noted that they still rose around 6% year over year. Two things on that note, Eric Lawrence, who’s the principal automotive analyst for specialty vehicles for Black Book, expects those motorhome values to go down because their market is is similar to towables. He also mentioned that you know, as we exit that seasonal sales peak, dealers are now going to be switching to a reactive mindset, meaning that as they restock, they have to kind of decide whether they will. Restock the products that are selling the best or just kind of restock anything that happens to sell. On one kind of final note, powersports maker. I’m probably gonna butcher this name. Powersports Bombardier Recreational Products earnings release last week, where they also saw a dip in those US retail sales, which was offset by strong snowmobile sales toward the end of their quarter, which ended April 30th. That’s all for me, so I’ll pass it over to you, Amanda. Amanda Harris 4:54 Great. Thank you. Truth and Aidan also last week in the latest round of tariff whiplash, federal court blocked President Donald Trump’s unilateral levies on May 28th. But the block was reversed a day later in a federal appeals court, and as of today, Emily, that is still pending. So we’ll have to see what will happen with his ability to put in unilateral global tariffs across the board. Regardless, automotive tariffs are likely to stay, at least in the short term. Also last week, Porsche Financial Services issued its first Prime auto lease asset backed securitization of the year, marking the first time a lease deal included Battery electric vehicles for the automaker. Several other issuers also came to market, including BMW Financial Services and Hyundai Capital America. Consumer spending, meanwhile, slowed in April with a small increase in personal spending of .1%, which was down from .7% increase a month prior. Thank you again and data scan for sponsoring this episode.There are new risk gauge solution allows financers to tap real time analytics and avoid missing red flags between audits. Thank you all 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.