Hello everyone, and welcome to the Roadmap from Auto Finance News.

Since 1996, the nation's leading newsletter on automotive lending and leasing.

It is Monday, March 16th, and I am Johnny Martinez II.

Last week, we continue to monitor the impact of the Iran War on the auto and auto finance industry, as well as oil and gas prices rising again, and asset-backed securitization spread widening as a result of

the ongoing conflict.

The Iran war contributed to spikes in oil and gas prices

a trend that continued into this week.

Brent crude oil prices rose 2.3% to $102.73 per barrel on March 13th, increasing pressure on fuel costs.

As of today, oil prices remained above $100 a barrel as of the time of recording.

While gas prices have increased 0.5% day over day and nearly 7% compared with last week, according to AAA's gas price tracker.

If sustained, higher gas prices could push consumers toward more fuel-efficient vehicles such as hybrids, though automakers currently offer fewer smaller models and are reassessing EV strategies after the 2025 federal tax credit elimination.

This follows a February where automaker sales

were mixed as Hyundai Motor America sold over 65,000 vehicles and were up 6% year over year, marking its third consecutive month of record sales, while Ford Motor Company reported just under 150,000 units in sales, down 5.5% year over year.

Overall, U.S.

new vehicle sales are expected to total about 1.2 million units in February,

down 3.4% year over year, according to a February 24th forecast from Cox Automotive.

This comes as U.S.

auto dealers enter the spring selling season with cautious optimism despite the ongoing concerns around the Iran War, affordability, credit conditions, and dealership traffic.

Dealer sentiment improved modestly for the first quarter, according to Cox Automotive's Dealer Sentiment Index released on March 3rd.

The index for current market conditions rose to 41 from 38 in Q4 2025, though it remains below the neutral level of 50.

Despite improving expectations, dealership traffic and profitability weakened, with the traffic index falling to 28 and the profit index dropping to 32, reflecting pressure from high vehicle prices and financing costs.

As the Iran War persists, we'll continue to follow its impacts on the auto finance industry, as well as auto consumer and dealer health.

So stay tuned.

For more on the auto industry stock performance last week as a result of the events happening with the Iran War, as well as some lender and incentive activity from the last week, I'll turn it over to Amanda.

Great, thank you, Johnny.

Yes, we did see rising oil prices contribute pretty quickly to a decline in automaker stocks last week.

And the Big Wheel Stock Index, which is our composite index of share prices for publicly traded automotive companies, landed at around 2195 as of March 10th.

And that was down about 5.1% month over month.

It's still up 48% year over year, to put that in perspective.

Large manufacturer stocks declined pretty much throughout all the major names throughout the day on March 12th after oil prices went up once more.

And on that day it was like over $102 per barrel, so even higher than it currently is.

For example, Ford stocks were down about 3% that day, General Motors stocks were down about 1%, and Stellantis stocks fell about 5%.

Large retailer stocks were pretty much mixed.

Shares at Asbury Auto, AutoNation, and Lithia Motors were down, but shares at Carmax and Carvana went up.

Stock volatility will likely continue as the industry grapples with more uncertainty surrounding the war and higher gas prices exasperate affordability concerns that we all know the industry has been dealing with for quite some time.

In fact, the new vehicle average transaction price rose again in February to just over $49,000, which is up about 3.4% year over year.

Incentives also rose to 6.9% of the average transaction price in February from 6.5% in January, but we're still below the 7% level of a year ago.

EV incentives, to no one's surprise, continue to outpace the wider market.

Automakers are working through their supply of EVs and are shifting gears now that the federal tax credit is eliminated, with many of them adopting their own incentives as well as tapping into state level

incentives as well.

So not surprising to see that incentive level spend still very much elevated in the EV space and probably will be for quite some time.

Lenders also are facing a competitive market in terms of rates and market share.

Bank of America, for example, recently expanded its rewards program, which includes auto loan rate discounts to all of their clients before they did have a program, but you had to meet certain thresholds for how much money you had invested in the bank.

This removes that threshold.

Your reward still depends, like what level you'll get, still depends

depends on how much you have invested.

And we'll continue to monitor how affordability plays out and how consumer lenders and dealers respond.

So stay tuned for more coverage on that.

Fantastic stuff.

And yeah, we'll keep monitoring all of that to make sure that we're giving the accuracy to the market, especially as all that keeps evolving, because it's just, it's such an ever changing landscape as that stuff comes together.

But kind of going into

what's happening in the wider space, information on the capital markets activity.

I'll turn it over to Truth.

Thank you, Johnny and Amanda.

Last week, we had a few deep dives into the capital funding strategies for OEMs and other auto financiers.

First, I sat down with Stellantis Financial Services Chief Financial Officer, Benny Duck, to unpack the capital's plans for 2026.

He told me that SFS is eyeing up to 8 auto asset-backed securitization deals this year as a part of its capital market strategy.

The captive, however, for context, normally issues around 6 to 8 deals within different tiers,

and that's on a yearly basis, going back a few years.

In fact, it already issued one prime auto ABS deal in February, and that was worth about $1.5 billion.

Duck also spoke about the way the captive is continuing to diversify its funding sources to better position itself for shifts in the market, such as shifts caused in the cost of funding from the Iran war, which I'll dive into a little bit more in a few minutes.

But also, the diversification helps

to support the desired origination levels for the captive.

Another strategy that we dove into was Consumer Portfolio Services.

Their management team revealed some of the financial strategies during its earnings call last week.

In fact, it will be expanding its prime lending program as it attempts to rebrand as a full spectrum lender for more than three decades.

Just for context, CPS has been primarily a subprime lender.

And they're able to do this with the help of a $900 million forward flow with Valley Strong Credit Union.

And in fact, when they branded further out into near

Valley Strong Credit Union also backed their venture with that endeavor as well.

So CBS also secured a $150 million warehouse line with Capital One.

So basically this $900 million forwardflow and the $150 million warehouse line means that the financier has credit readily available, and that's basically how the CEO positioned it during their earnings call.

Next on the list is Carvana.

Carvana issued its first auto ABS deal, partially backed by new vehicle loans, and that part is what was really new for the retailer.

The deal was primarily prime loans and was worth about 1.1 billion, but this is the first time ever that we've seen new vehicle loans in any Carvana transaction.

Something to also point out about this transaction is that the portion of of loans with a 72 month or higher original term increased.

This is important to note because longer term loans and ABS deals were assigned to watch that ABS experts flagged at the start of the year within several of their outlets.

Last but not least,

We are continuing to see the impacts of the Iran war

the capital markets.

What we reported on last week was that auto ABS spreads across investment grade challenges

continuing to

So while we saw this take place with both prime and subprime tranches, we saw that the trend was more pronounced in subprime.

No surprise there, subprime always has it worse than its prime counterpart, but that is still something to note.

And Bank of America Securities Head of ABS Research, Teresa O'Neill, told me that the Middle East conflict

has led to volatility in the financial market, and that volatility is what is leading to spreads widening.

She also said that investors are likely to continue to be concerned if the war persists, and their concerns primarily surround higher funding costs, as

those costs will be an impact of wider spreads.

higher yields and can translate to higher inflation and have credit performance implications.

So that's really the wrap up from capital markets last week.

But for more on EVs as well as affordability, I'll turn it over to Aiden.

Thank you, Truth.

So last week, EV maker Lucid Motors held its annual Investor Day.

And as both Johnny and Amanda mentioned, this is really coming off the backdrop of the removal of the federal EV tax credit and the successive slump in U.S.

EV sales across the industry.

There, Lucid announced it would expand to seven more locations across North America, but would also position a more global expansion with 25 locations in seven new countries across Europe.

and a few locations in the Middle East.

This was in part from a growing EV adoption in Europe compared to the United States.

So at the presentation, it was mentioned that the average EV adoption rate in North America by the end of this year will be around 8% compared to 20% in Europe.

Also, eyeing affordability, LOTSID looks to sell 3 mid-size models in the coming years, with at least one costing under $50,000.

Production for these vehicles is expected to begin by late 2026 or 2027 and are part of the EV maker's

path to profitability,

which comes with these affordable models, this expansion globally, and then potentially selling software, as well as some concepts they announced for a robotaxi service similar to the Tesla robotaxi service.

Speaking of affordability, auto refinance volume surged in the fourth quarter of 2025, rising by more than 40% year over year, according to Experian.

Chase Auto, which has set a new record in refi volume monthly since offering it in May 2025,

has seen really two types of customers attracted to refi volume in the recent months.

One who can afford a higher monthly payment, but would like to shorten their loan term and lower their APR to get out of that car loan quicker.

And then customers who do need more cash flow monthly and are willing to get a lower rate and monthly payment through refinancing.

Lenders like Chase are optimistic that refi volume will continue to grow, especially if we see another Federal Reserve interest rate cut this year.

And then one other note on affordability, we also saw customers start to see relief from tax refunds this season.

Those tax refunds are about 10% higher year over year, according to Jeffrey's data.

And subprime auto lenders like Arrivo Acceptance saw loan application volume rise by 15% more than they expected from tax refunds, with consumers both originating more used vehicle loans and then catching up on their delinquent payments with those funds.

Those increases come from the tax changes brought on by last year's One Big Beautiful Bill Act.

And while there has been some real optimism of it driving sales, lenders like Arrivo Acceptance also issued some concern for the continued affordability pressures we've seen that once that tax refund money is spent, we may be seeing some of these same affordability issues you've heard in weeks prior on the podcast.

So that is it from me, but I will pass it over to Johnny with some more updates on the power sports space.

Yeah, as far as the power sports market goes, last week we saw Retailer Right Now Power Sports report its Q4 and full year 2025 earnings.

F&I revenue of $24.1 million was up 6.6% year over year for Q4, but for the full year it was down 5% to $97.3 million as new unit sales declined.

Meanwhile, their used unit sales were able to increase both in the quarter and for the full year, contributing to the company's F&I performance.

Additionally, Powersports lenders returned to the securitization market with RV Marine ABS deals, with a $511 million deal from M&T Bank and a $563 million deal from U.S.

Bank over the last month or so.

While asset performance remains stable, RV loans carry higher risk due to longer loan terms, rising delinquencies, and repossession challenges.

Lastly, lenders Octane and Huntington launched a digital financing platform for Aryans and Gravely dealers to streamline outdoor power equipment purchases.

The program integrates prime and near-prime lending on one portal as the OPE market grows to an estimated $34 billion by 2030.

As for this week, we will have further updates on the impacts of the war and trends across affordability, funding, and technology, as well as the power sports market.

As a reminder, the agenda is now live for our inaugural Auto Finance Capital Summit, taking place May 11th and 12th in Nashville.

Auto Finance Summit East also takes place May 11th through 13th in Nashville.

Be sure to register for our spring events.

As always,

Thanks for joining us on the roadmap and be sure to follow us on X and LinkedIn.

We will see you online at autofinancenews.net and here next time.