Auto lenders expect 2024 to be a year of growth driven by technology updates and relaxed credit standards. Powersports' sales and financial performance has been mixed.
AI-based subprime lender Lendbuzz Originate more than $1.1 billion in auto loans by 2023 50% increase compared to previous yearWe believe that geographic expansion and expanded criteria will once again increase calls by 50% year over year in 2024.
CUDL I'm looking forward to Launch the Universal Credit application This year, dealers will be able to access an application accepted by all credit unions in Fintech's credit union lending network.
In terms of power sports, National power sports auction chief executive officer jim woodruff project Motorcycle sales are expected to remain flat Off-road bikes in 2024 Financial penetration rate reached 59% According to the data, in 2023 Motorcycle Industry Council.
harley davidson financial services' Number of originations decreased by 1% YoY Meanwhile, retail finance receivables increased 1.2% year over year to $6.8 billion in the fourth quarter.
On this episode of “Weekly Wrap,” Auto Finance News Deputy Editor Amanda Harris and Senior Associate Editor Riley Wolfbauer discuss the week's top stories ending February 9th and what's in store for the coming week.
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Transcription:
Editor's note: This transcript was generated by software and is provided “as is.” Some transcription errors may remain.
Amanda Harris 0:20
Hello everyone. Welcome to our roadmap of auto finance news and major international news on auto loans and leases since 1996.
It's Monday, February 12th, I'm Amanda, and I'm joined by Riley Wolfbauer.
This is a weekly roundup of what happened over the weekend in auto finance.
Economic news on February 9, 2024 showed that consumer prices excluding food and energy items rose by 3.3% annually. The final three months of 2023 are broadly in line with levels at the end of last year, with stabilizing price pressures providing further evidence that inflation is easing and the Federal Reserve likely to begin cutting interest rates soon. , news related to auto finance may also be released. Subprime lender FinBe USA (formerly Credito Real USA) has launched a financing program for franchised dealers following its merger with Bepensa Capital. The lender is offering a program to franchise dealers that will provide loans to Hispanic consumers, regardless of whether they have a personal tax ID number. In addition to traditional subprime products, Thingy partners with his 100-200 franchised dealers across 33 states. Ford Credit also reported fourth-quarter and full-year profits last week. The captive balance in the fourth quarter rose 6.2% year-on-year to 82.3 billion, and the lender's full-year pre-tax profit fell to 1.3 billion, compared to about 2.4 billion in the same period last year. This is mainly due to higher borrowing costs, increased credit losses and normalization of auction prices. . Auction prices fell 8.4% to an average of $27,775, while lease return rates rose to 41% from 29% and 18% in the third quarter.
The National Automobile Dealers Association trade show in Las Vegas in Q4 2022 also highlighted several key themes, including growth and technology upgrades. We spoke with AI-based subprime lender Lendbuzz and learned that the lender will have originated more than 1.1 billion auto loans in 2023, an increase of 50% year over year. Ta. Lendbuzz expects originations to rise again by around 50% year-on-year in 2024, driven by geographic expansion and financial institutions relaxing standards again following last year's tightening. CUDL 2 plans to launch a universal his credit application this year to give dealers access to the application, which is expected to be accepted by all credit unions within the fintech credit union lending network. CUDL is also focusing on electronic contract solutions this year, following several technology initiatives last year. … CUDL’s network funded $46.7 billion in auto loans in 2023, down from $59 billion in 2022.
Amid liquidity challenges and credit tightening, Harley-Davidson Financial Services' powersports standards are being relaxed again, and Khadr doesn't expect loan volumes to increase this year. Retail finance receivables increased by 1.2% year-on-year, resulting in annualized retail credit losses of 6.8 billion. For the full year, it increased 110 basis points to 3%, while lender loan loss provisions were flat at 5.4% in the fourth quarter, while HDFS increased due to credit provisions. Losses during the quarter. Livewire, Harley-Davidson's electric motorcycle subsidiary, also boosted motorcycle sales as its global inventory was set at 49,000 units, with sales of 514 units in the fourth quarter, up from 32,000 units in the same period last year. We have introduced incentives for This compares to approximately 69 units in the same period last year. Riley also attended his AIM Expo in Las Vegas last week, where he shares some updates on the powersports market.
So Riley, take it away. Riley Wolfbauer 4:12
Yeah. So, while I was on the show, I attended a few sessions and spoke.
I spoke to several dealers walking around the floor while looking at inventory, so I'll quickly outline some takeaways from the event.
So one of the first things I did was talk to the CEO of National Powersports Auctions.
Jim Woodruff, I talked to him about his 2024 revenue outlook, and he's pretty positive about it. He expects motorcycle sales to remain roughly flat from 2023 to 2024. Sales in 2023 were 660,000 units, an increase of 2% from the previous year. He expects there will be some hesitation from consumers as they remain concerned about the economy in general, high interest rates and the ability to spend discretionary money in the powersports sector. Another lesson learned: I spoke with Scott Yarbrough about vehicle valuation. He generally expects unit prices to further normalize into 2024, returning to normal seasonal trends of lower prices and higher prices during colder months. Prices increase during the spring and summer sales seasons. This is because the value has continued to rise over the past few years. The only real impact of seasonality over the past few years has been during the colder months, when prices rose, but not at the same rate as during the spring and summer seasons. So seasonality has always been there, but it hasn't been the same kind of seasonality as when you see financial colors slowly drop in price on the off-road bike front. The financial penetration rate for off-road adventure bikes in 2023 was 59%.
Approximately 184,000 off-road bikes were sold that year. That's a pretty decent financial penetration rate. There are no numbers to compare. See how things have changed since 2022. However, the general financial outlook remains fairly strong. I'll then briefly summarize my conversations with dealers in the field. Well, they're seeing the same things that we've been reporting on for the past few months. That means there's still a large amount of 2022 inventory on site and they're taking a little bit of a loss on that inventory. The 2024 model year has arrived and some consumers looking for a new unit are opting for his 2024 model. But then there are consumers who come in looking for newer units. There are also things they like. What about price cuts in 2022? Hmm, so they'll pick it. This is how dealers move old inventory. Profit margins are under pressure as inventory builds up as floor plan costs rise, but the general outlook is that units will be sold in 2022 and 2023 to secure space for 2024. This means that more manufacturers will be offering discounts. It slightly improved the sales pace the market was seeing before the coronavirus disrupted all supply chains and backorders, and also brought in an influx of consumer demand. These are the high-level points of this event.
Amanda Harris 7:58
And you have to ride an electric bike, right?
Riley Wolfbauer 8:00
Yeah. It is the first time.
Amanda Harris 8:03
Pretty cool. Pretty cool. Yeah, definitely great. Well, there will be a few more articles about powersports this week. We will also be publishing several articles about various financial institutions and their efforts in the industry. Stay tuned for the rest of this week's covers. That concludes today's episode. Thank you for joining our roadmap. Be sure to follow us on X (formerly known as Twitter) and LinkedIn. See you next time here with autofinance news.net.
