Volatile vehicle valuations ahead

Since the Great Recession, new vehicle sales have been building favorable momentum year over year. Until recently, production has aligned nicely with consumer demand keeping incentives in check, and used car values have remained relatively stable despite growing off-lease volumes, consistently touching near historic highs. For auto lenders, the collateral risk involved with consumer lending has been relatively predictable and, for the most part, “all has been right with the world.” But now, many industry analysts are anticipating a decline in new vehicle sales over the next few years, and auto lenders will need to reassess their credit origination, collection, and remarketing strategies, especially those involving transactions with negative equity, longer terms, and higher loan-to-values in light of shifting expectations around future car values.

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Luis Lozano Luis Lozano
Líder de Automotriz
Tel: 01 55 5263 6000