Auto lenders, dealers look to tax season for boost

Auto dealers are expecting a strong tax season to spur a sales jolt early this year, but lenders and dealers are split on their full-year outlook amid rising vehicle prices and macroeconomic challenges facing consumers.

Other factors that market participants are monitoring include how fluctuating interest rates and unemployment will affect consumer affordability and car sales.

In fact, December 2025 sales were projected to fall 3.5% year over year to 1.4 million, according to Cox Automotive. Those figures will be released later this month.

However, 2025 new-vehicle sales reached the best level in six years, according to a Cox Auto Dec. 17 report. Full-year sales were projected to increase 1.8% in 2025 compared with 2024, according to Kelley Blue Book estimates.

At the same time, credit access improved in 2025 as fewer banks reported tightening their lending standards. The auto loan rejection rate, however, climbed 1 percentage point YoY in October 2025 to 15.2%.

Still, retailers such as Tempe, Ariz.-based DriveTime are eyeing growth in 2026 as they navigate the changing auto landscape. Chief Executive Mary Leigh Phillips told Auto Finance News that DriveTime is eyeing double-digit growth across its subsidiaries.

Tricolor effects

Among the changes the auto industry will navigate in 2026 are the effects of Tricolor Auto’s collapse, which is still playing out in court. At today’s court hearing, backup servicer Vervent’s responsibilities were outlined and permission was granted for Vervent to use Tricolor funds to pay collateral insurance protection and Texas seller-finance sales taxes.

Read AFN’s top 5 Tricolor stories in 2025.

Listen as Auto Finance News Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush unpack recent auto finance news and provide a look at the year ahead.

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