Auto credit performance worsens, prompts provision spike

The Auto Finance Roadmap

High rates and rising consumer debt levels still drive a worsening auto loan landscape.

Delinquencies and losses rose across prime and nonprime securitized auto loans in Kroll Bond Rating Agency’s August auto loan asset-backed securitization index published Sept. 23. Prime recovery rates increased while nonprime recoveries declined.

CarMax Auto Finance (CAF) also increased its provision for credit losses by 25.4% to $112.6 million for the fiscal second quarter of 2025, ended Aug. 31, according to the company’s earnings release. CAF’s finance income fell 14.4% year over year to $115.6 million, while originations ticked down 1.7% YoY to $2.2 billion.

Meanwhile, multiple auto lenders are preparing for growth in the coming year. Affinity Federal Credit Union is looking to add to its dealership base in New York, New Jersey and Pennsylvania as it steps back into leasing after a three-year hiatus.

SameDay Auto Finance is planning to double its portfolio to about $60 million within the next two years after expanding into Oklahoma and prioritizing top-performing dealerships.

Auto Finance News is also pleased to highlight nine powersports finance executives to watch in 2025 following a turbulent first half of 2024, but with optimism heading into the 2025 season.

In this episode of the “Weekly Wrap” Auto Finance News Editor Amanda Harris and Associate Editors James Van Bramer and Ashley Savage discuss growth and performance trends for the week ending Sept. 27.