Autos Mythbuster: Under the Hood of Consumer Credit

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Season 9, Episode 19

This week on “Know More. Risk Better.” brings together hosts Winnie Cisar and Zachary Griffiths along with Peter Simon, Todd Duvick, and Jory Eisenberg for an “Autos Mythbuster” edition examining auto loan performance, consumer credit health, and whether rising repossession rates signal broader systemic risk. The team explores the bifurcation in consumer credit by income tier, the backward-looking nature of current delinquency and repo data, and why 2022 vintage loans have proven particularly problematic due to aggressive post-COVID origination, elevated vehicle prices, and deteriorating affordability for lower-income consumers.

Peter and Todd discuss diverging trends at CarMax and Carvana, regional variations in auto loan performance, and the impact of extraordinary vehicle price depreciation on underwater loans. The team analyzes new and used car affordability challenges, tariff impacts on vehicle pricing, Ford and GM’s profit-driven strategies, and the stabilization of competitive dynamics in the auto sector. They examine the ABS market’s role in auto lending, loan-to-value considerations, and the minimal exposure of larger banks to subprime auto risk. This insightful discussion provides valuable context for credit analysts, investors, and market participants seeking to understand consumer credit trends, auto sector dynamics, and risk management in today’s economy.