Affordability key challenge moving into 2025

Affordability key challenge moving into 2025

Bank pullback in asset-backed lending has spurred growth for lenders that provide floorplan financing for independent dealers, while banks are expected to further tighten credit access in 2025 as demand weakens.

Floorplan providers First Business Bank and NextGear Capital have seen a boost in their portfolios as dealers use more of their floorplan lines of credit for inventory and banks scale back in asset-backed lending, including auto. A higher percentage of banks are projected to tighten credit in early 2025 as consumer demand for auto financing is expected to weaken, according to a new Auto Finance News forecast.

Higher prices add to affordability challenges, with the average transaction price up 1.5% year over year in November. Incentives helped boost sales and contributed to captives’ lead in new-vehicle financing in the third quarter.

As 2024 ends, affordability remains the prevailing challenge for consumers, dealers and lenders across the auto finance and powersports finance markets.

In powersports, sales fell 5.4% YoY in November as dealers faced elevated inventory levels, higher floorplan costs and mixed demand.

Meanwhile, Hyundai Capital America President and Chief Executive Marcelo Brutti was named the 2024 Auto Finance Executive of the Year.

In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and associate editors Ashley Savage and James Van Bramer look back at trends in 2024 and discuss top-of-mind challenges headed into 2025.

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Episoder(335)

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