Podcast: Incentives pick up, dealers eye LTV requirements

Hello everyone and welcome to the road map from auto Finance News. Since 1996, the nation’s leading newsletter and automotive lending and leasing. It’s Monday, December 2nd and I’m Amanda Harris, joined by James Van Bramer and Ashley Savage. This is our weekly wrap on what happened in auto finance for the week ending November 29th, 2024. In economic news, the core personal consumption expenditures price index, which doesn’t include food and energy prices, increased 2.8% year over year and .3%. Sequentially in October. An automotive manufacturer, news Nissan Motor Company and Stellantis reported leadership changes this week. Nissan. Financial officer Stephen Ma is reportedly planning to step down from his position on the heels of thousands of job cuts in the departure of the company’s chief operating Officer, Stellantis chief executive Carlos Tavares has stepped down sooner than expected as well. The company’s CEO search is. Underway and is expected to conclude within the first half of 2025. In automotive finance, affordability and technological innovation continued to be top of mind U.S. bank, for one, is investing in digital capabilities across auto, recreational vehicles and marine product financing as the bank looks to support growth as rates decline. John Hyatt, chief executive turn executive vice president of dealer services at the US Bank, told me that the financier is focused on sustainable growth of its auto portfolio and expects leasing and demand to pick up next year. You can read our full spotlight Q&A feature to learn more. Last week, we also took a deep dive into what dealers are saying about aftermarket products and James has the details there. So James. James Van Bramer 2:03 Thank you so much, Amanda. So dealers are urging lenders to loosen their loan to value restrictions on aftermarket aftermarket products such as service contracts and guaranteed asset protection coverage or otherwise known as gap. Now we know that given elevated interest rates and the affordability concerns that we’ve seen over the last year, that loan terms have increased and loans are already stretched to limits that perhaps both lenders and consumers alike probably don’t necessarily love. That said, dealers are dealers. Believe. That there is more room for flexibility for coverage, given that the long in the long run, the benefits of these products benefit all parties involved. For example, service contracts can be vital for a consumer to remain in their vehicles, dealers told told me. By that I may continue Driving a functional car, but also willing to make a payment on their car loan. Dealer dealers argue that without such protections that the consumer is less likely to make payments on their car loan because if their cars aren’t. King, they aren’t going to be paying. That said, despite the economic headwinds, dealers dealerships have noticed that lenders have begun viewing. Sorry that lenders have begun viewing value added products as a benefit with many with many lenders having a keen eye on specific products. That said, that’s that. That said, I’m sure we will hear a lot more from dealers and lenders on this topic moving forward and assuming economic conditions start to change and perhaps get better. Maybe. There is a best of both world scenario where aftermarket products don’t necessarily stretch. Lt. VS to high the near future we’ll we’ll we’ll keep an eye on that for now. That said, we also had several updates on incentives. I’ll turn it over to ASH for more. Ashley Savage 3:52 Thanks James. Last week’s coverage also included a look into Black Friday incentives in the auto industry. James, your coverage specifically last week highlighted that the latest holiday deals feature several low APR offers, but also a few cash incentives which you noted have been rare for much of the year with the 2024 Chevrolet Silverado 1500, for example, consumers can find one point. 9% APR financing for 60 months, plus a $3750 cash back offer for those who trade in eligible vehicle. Similarly, we saw two offers on the 2024 Dodge Hornet. Those offers included a lease deal of $199 a month for 24 months, with 3629 dollars due at signing and 0% APR deal for 72 months. The GMC Sierra also has two offers, those being 0% APR financing or a $6000 purchase allowance allowance when a customer trades in a vehicle. Sticking with incentives for a moment, but on the powersports front, BMO Capital Markets indicated that incentives in November were similar to promotional levels a year ago. But remain elevated and aggressive when you compare them with 2019 prior to the pandemic. Some November highlights include Polaris decision to increase its model year 2024 snowmobile rebate to $2000, up from 1500 previously. Brp also increased their model year 2024 snowmobile rebate to 2000, up from 1500 before Kawasaki bumped up its model year 2024 Ridge side by side rebate to $3000. And that’s up from 2000 before. And finally, Hog kicked off its tis the season to buy a Harley-Davidson program, where consumers, for the first time can get $3000 cash on model year 2024 bike. Also last week we ran our 2024 Powersports Finance Achievement Achievement Awards feature. Which honored adaptability in a turbulent market. The future shares an inside look at our award winners from this year’s Power Sports Finance Summit and shares added insight on Octane lending’s Jason Guss, who is recognized for leadership and growth, Harley-Davidson Financial Services recognition for innovation and synchrony’s performance initiatives. Amanda, I’ll pass it to you for some closing comments. Amanda Harris 6:04 OK. Thank you, Ashley and James. We also have our auto finance excellent awards feature up. So if you like some more insight into the winners on our 2024 auto Finance Excellence Awards for leadership and strategy, you can check out the full feature for all the awards that. We gave out and the winners there on our website and I will do it for today’s episode. Thank you for joining us on the roadmap. Be sure to follow us on X and LinkedIn and we will see you online at autofinancenews.net in here next time.