eTopical Precious Finds
With the auto industry and consumer preferences constantly evolving, auto lenders and dealers need to stay up-to-date with current trends to attract more buyers while tackling higher delinquency rates and increasing cases of synthetic identity fraud.
Creating a more personalized and seamless customer experience helps auto dealers find high-intent, qualified buyers while encouraging more consumers to visit their locations in person. At the same time, auto lenders can provide the best services and reduce financial risks if they know which lender type their customers typically prefer. For example, Baby Boomers usually rely on captive financing, while mostly Gen Z consumers rely on getting an auto loan from a credit union.
In terms of auto industry trends in 2025, auto loans and leases are the fastest growing debt category not related to mortgage, with total outstanding balances reaching almost $2 trillion. Auto delinquencies are also climbing, with generations like Gen Z feeling the most pressure. The percentage of deep subprime and subprime borrowers with auto loans and leases is growing significantly year over year as well. These financial struggles, along with rising interest rates and higher prices, are causing fewer cars to be sold. In fact, auto loans and lease originations have dropped by more than $9 billion.
Fraud, especially in the form of synthetic identities (Syn ID), has grown annually with auto loan credit applications that are at risk of Syn ID rising from ~5% in 2019 to +85 in 2023, which is a 60% increase in just four years. Loans and leases with a Syn ID risk have a much higher delinquency rate than those without the Syn ID risk, leading to more financial loss and credit risk.
Auto lenders and dealers that are proactive about fraud prevention and implementing risk management strategies while optimizing the customer experience can better position themselves for long-term success.
