The Auto Finance Roadmap

Auto lenders and dealers are navigating mounting pressure in 2026 as inflation, geopolitical conflict and regulatory shifts weigh on profitability and consumer behavior. 
Auto lenders are responding to tighter margins by strengthening dealer relationships and expanding into full-spectrum financial services. Technology also continues to improve efficiency and credit decisioning, resulting in increased applications and more ways for dealers and lenders to collaborate to improve profitability amid affordability concerns. 
U.S. inflation surged in March, with the consumer price index rising 0.9%, the largest monthly increase since 2022, driven by higher gasoline prices amid the Iran war. The added challenges come as subprime bankruptcies and rising delinquencies begin to plague buy here, pay here dealers. 
Despite affordability pressures, vehicle demand remains resilient but is shifting, with higher gas prices boosting EV interest and driving a 34% year-over-year increase in public fast-charging stations. As a result, several OEMs saw growth in EV sales during March, although first-quarter numbers remained mostly low. 
Compliance concerns 
Fraud is also rising globally, with losses from auto lending first-party fraud hitting $7.2 billion in 2025, part of an estimated $10.4 billion in first-party fraud losses.  
Additionally, FirstRand plans to exit the U.K. motor finance market after setting aside £750 million ($994 million) for mis-sold loan claims. The move follows findings that 14.2 million of 32.5 million agreements were unfair, potentially costing the industry about $12.3 billion in repayments across 12.1 million loans.
In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez II, Senior Associate Editor Truth Headlam and Senior Associate Editor Aidan Bush discuss top trends across macroeconomic dynamics, affordability, funding and powersports lending for the week ended April 10.  
Subscribe to “The Roadmap Podcast” on iTunes or Spotifyor download the episode. 
Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with the Auto Finance Summit East and the Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live.

Auto lenders are working to balance growth against rising credit and affordability pressures as the market adjusts to shifting consumer behavior in 2026. 
Luxury vehicle financier Rizz Lending this month secured a $300 million warehouse facility to scale originations to about $200 million this year. Meanwhile, fintech lender Lendbuzz is targeting 20% growth in originations by adding near-prime borrowers and using cash-flow-based underwriting.  
Meanwhile, other players, including Credit Acceptance Corp., remain focused on underserved consumers, a segment of more than 90 million Americans.  
Consumers are also adjusting to affordability constraints by changing their approach to car buying. Down payments declined in the first quarter while loan balances rose, and longer-term financing – including 84-month loans – reached record levels. Meanwhile, fewer consumers are applying for auto loans even as rejection rates decline, signaling softer demand. 
At the same time, credit conditions continue to tighten. Canada’s goeasy, a subprime lender, reduced its auto exposure and tightened standards after charge-offs surged.  
Lenders also pointed to weak dealer data and rising subprime delinquencies as ongoing risks. Concerns arose around data quality because AI-driven “credit washing” distorts borrower profiles. 
Meanwhile, auto sales slowed in the first quarter, partly due to comparisons to the unusual tariff-driven surge in 2025. Higher-income buyers continue to support demand, while consumers shift to used vehicles or exit the market.
Funding markets remain stable, with only modest widening in auto ABS spreads and steady investor demand, though banks are becoming more cautious as private credit exposure grows. Still, leasing may provide an offset, with Credit Union Leasing of America projecting growth as lenders seek alternatives to long-term loans. 
In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez II, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss top trends across macroeconomic dynamics, affordability, funding and powersports lending for the week ended April 3. 
Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with the Auto Finance Summit East and the Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live.

Continued concerns around the Iran war and an increase in fraud schemes are placing more stress on auto lenders, dealers and consumers while driving shifts in risk management and strategy. 
The war has pushed oil prices above $100 per barrel, fueling inflation and widening auto asset-backed securities (ABS) spreads. Prime spreads have widened by up to 17 basis points, increasing funding costs and tightening credit conditions. Higher fuel costs are also squeezing consumers, especially subprime borrowers, reducing disposable income and raising delinquency risks.  
Those increased risks for subprime borrowers contributed to a 130% year-over-year jump in refinance activity in February as borrowers seek lower payments amid the market strain. Lenders also continue to tighten underwriting amid rising defaults, with early payment defaults reaching decade highs. 
To compound the pressure on the auto sector, fraud risks continue to rise, with AI-driven “dealership cloning” scams, in which fake websites impersonate dealers, leading to millions in losses, damaging consumer trust and dealer reputations. Meanwhile, TD Bank is educating its customers and employees how to combat rising fraud on the lending side. 
In response to the macroeconomic uncertainty and increased fraud, lenders and dealers continue to adjust operations as higher gas prices shift demand toward more fuel-efficient vehicles. Meanwhile, firms are adopting AI tools to improve operations but are emphasizing responsible use, including regulatory alignment and bias mitigation. 
In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez II, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss top trends across macroeconomic dynamics, affordability, funding and powersports lending for the week ended March 27.

AI adoption is changing how auto finance companies approach efficiency gains and how the industry scales, Sanjiv Yajnik, president of financial services at Capital One, tells Auto Finance News in the latest episode of “The Auto Finance Roadmap” podcast.  
“The rate at which we are innovating right now, given AI, is unbelievable,” he says.
Technology and AI-based tools are making processes faster and less expensive, Yajnik says. “People do research in a different way,” he says. “They can find things in a different way. It's much faster.” 
On the other hand, technology is contributing to shifts in the industry’s structure, Yajnik says. “Industry structures are based on two things. One is scale, because scale determines how quickly and how consolidated an industry grows, and the other is [that] the demarcations between two industries dissolve,” he says.  
While historically, “sometimes, there is one industry that does only finance, and another does only search. When technology comes to bear, there's a reason they are separate, because you need to pour a lot of money into it [and] you need certain expertise,” he says. “But when that expertise changes, the industries collapse into something completely new, and this is why incumbents often get left behind.” 
Adapting to changes in technology industrywide requires building from the ground up, Yajnik says. “When you've got major technological change, it's hard to be a generalist and say, ‘I'll just get these engineers, and I'll make them do a few things,’” he says. “You have to get fully into it 100% and start playing with all the things yourself.” 
Yajnik holds 27 patents, with more pending. Capital One’s auto originations increased 8.5% year over year in the fourth quarter of 2025 to $10.2 billion, with auto outstandings up 8.8% YoY to $83.6 billion. 
In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris and Capital One’s Yajnik discuss AI innovation in auto finance, including responsible use of AI and technological changes still to come in the industry.

The auto finance industry continues to navigate heightened economic uncertainty as the Iran war drives oil prices higher, adding pressure to consumers already facing elevated vehicle prices and borrowing costs.  
Crude oil prices surged above $100 per barrel to end last week amid fears of supply disruptions around the Strait of Hormuz, a critical route for roughly one-fifth of global oil shipments, according to market researcher Energy Aspects’ data. The spike, which continued into today, pushed U.S. gasoline prices higher and increased volatility across financial markets. 
Higher fuel prices are adding to affordability challenges that have defined the auto market for much of the past year. The average new-vehicle transaction was $49,353 in February, while the average monthly payment for a new vehicle climbed to around $767, according to Kelley Blue Book data. 
Despite those pressures, credit activity remains steady. Subprime borrowers accounted for 15.3% of all vehicle loans in the fourth quarter of 2025, up from 14.5% a year earlier, as lenders seek to balance growth with risk management. 
At the same time, tax refunds are providing a temporary boost in demand, with the average refund expected to reach $3,742. Some lenders have reported 10% to 15% more loan applications than expected in the early weeks of tax filing. 
Meanwhile, capital markets remained active even as political tensions due to the Iran war widened credit spreads. Issuers continued to tap the asset-backed securities market, including Carvana, which issued a $1.1 billion prime auto ABS transaction and several securitizations by lenders seeking diversified funding. 
In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Deputy Editor Johnnie Martinez II, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss top trends across macroeconomic dynamics, affordability, funding and powersports lending for the week ended March 13.