Auto Loans

What Will the Change of Seasons Bring to Subprime Auto?

Nov 01, 2020 | By JOSEPH CIOFFI

Our last market study, based on surveys conducted in the spring – before and then after the COVID-19 crisis began – found industry professionals surprisingly sanguine. Now, as the temperatures begin to cool and the virus rolls in waves across the country against the backdrop of a presidential election and continued uncertainty of future relief programs, we’ve gone back to market participants, including originators, investors, servicers and trustees, to gauge their expectations six months into the crisis. We’re gearing up to present the results of our updated study at the NAF virtual conference on November 17th.

Like the switchbacks on the Nürburgring racetrack, the winding road of 2020 is getting only more precarious. Back in the spring, participants’ concerns were moderate and measured with a great deal of wait-and-see. There was cautious optimism that consumer relief programs and credit extensions could bridge the market to safety on the other side of the pandemic. Now many months later, borrowers are rolling out of those programs and extensions are dropping, but what does that mean for ABS participants?

We’ll answer these questions and more at the NAF conference. Just like in our prior webinar this spring where we reviewed the Q2 market study, we are bringing back a panel of industry professionals to discuss the results: Ines Beato, Senior Vice President, US ABS - Global Structured Finance at DBRS Morningstar and Sean Morgan, Vice President of Finance at Westlake Financial Services.

There may be no owner’s manual to help us through the pandemic, but we can get directions by listening to insights provided by those on the front lines of the most pressing issues. We hope you’ll join us to hear my discussion with Sean and Ines.

In the meantime, for a recap of our pandemic market views from earlier this year, you can check out my talk with Joel Kennedy on the ConsumerFi podcast and our recent article in Non Prime Times.