February 2024
Ford Credit?earnings before taxes saw pressure in 2023 as credit costs remained elevated and auction values dropped, even as its portfolio increased.
The captive posted loan growth to end the year, with $82.3 billion outstanding, an increase of 6.2% year over year and 0.5% from the third quarter, the company reported in its fourth-quarter earnings supplement.
Earnings before taxes (EBT) on the year fell to $1.3 billion, down from $2.4 billion in 2022, reflecting higher borrowing costs, higher credit losses and normalizing auction values, according to the earnings presentation. EBT in Q4 landed at $280 million, up from?$191 million in Q3?but down from?$1.1 billion in Q4 2022 .
Ford Credit EBT in 2024 is expected to be “slightly up at $1.5 billion,” Ford Motor Co.?Chief Financial Officer?John Lawler?said on the company’s earnings call Feb 6.
Used-vehicle values were flat sequentially in January but fell year over year as retail sales lagged last year’s levels and supply ticked up.?
The Manheim Used-Vehicle Value Index was unchanged month over month at 204 in January, but declined 9.2% YoY , according to Cox Automotive. Prices fell across all major market segments on a YoY basis, with values on compact cars falling the most at 13.2%. Luxury car values fell the least at 9%.
On the used electric vehicle (EV) front, seasonally adjusted values ended 2023 down 16.9% YoY compared with a decline of 7.1% YoY for non-EVs, according to Cox. In January, EV values fell 16.4% YoY while non-EV values dipped 9.3% YoY.?
Recovering inventory levels along with declining interest rates are likely to contribute to a strong auto sales market in 2024, Shirley Jones, chief financial officer at Car Pros Automotive Group, told AFN.
领英推荐
Auto finance executives largely expect leasing to surge over the next two years as incentives resume and supply builds, but predictions vary on how much it will increase.?
Leasing across the industry is likely to surpass pre-pandemic levels within the next two years, Mark Chandler , vice president for business development at Credit Union Leasing of America (CULA), told Auto Finance News on Feb. 2 during the National Automotive Dealers Association (NADA) Show in Las Vegas.
Chandler projects that leasing will reach 40% nationally by yearend 2025, but projections on where leasing is headed were mixed at NADA.??
Experian expects leasing to reach about 28% nationally in 2025 as incentives become more prevalent, Melinda Zabritski, senior director of automotive financial solutions, told AFN, adding that leasing remains largely regional.?
Financiers may now submit 2023 results for inclusion in Big Wheels Auto Finance Data: A Ranking of the Nation’s Top Car Financiers .
Big Wheels produces the definitive tabulation of automotive lending and leasing activity in the United States. It offers a unique opportunity to contribute your company’s performance data to a ranking of the best of the best in auto finance — a ranking that Wall Street firms and others rely on for performance benchmarks.
Submissions are due by Friday, Feb. 23.
Published annually since 1999, Big Wheels is widely used within the investment community, so your accurate and timely responses are most appreciated. For more information or to receive the survey in Excel, email Marcie Belles at [email protected] .