The COVID-19 pandemic has been the dominant issue affecting the decisions and performance of all auto lenders in 2020, halting manufacturing production and causing multi-month payment deferral programs for consumers and dealers alike.
Here are our top five stories of 2020:
American Honda and BMW AG were forced to halt manufacturing production in several countries in March due to a pandemic-induced drop in demand. Production issues continued to plague the auto industry for months amid rising COVID-19 cases, sparking inventory issues still felt at the end of the year.
Ally Financial, which manages an auto loan portfolio of more than $ 80 million, has offered payment deferrals and other help to its reseller and consumer customers during the pandemic. Since March, several auto lenders have offered deferral payment programs to consumers, and many continue to work with customers on a case-by-case basis.
At the height of the pandemic, worrying debt levels, record defaults and “abusive lender practices in the market” prompted U.S. Senate leaders to demand action from the Consumer Financial Protection Bureau. One of the concerns was that consumers were being harmed by the interest accrued during the term of a payment extension.
Nissan Motor Co. and its captive, Nissan Motor Acceptance Corp., joined other auto lenders in March to help consumers with payment extensions on loans and leases. NMAC, based in Franklin, Tennessee, was the ninth-largest auto lender in 2019 with $ 44.7 billion outstanding, according to Big Wheels auto finance data.
Toyota Financial Services launched relief options for current and new dealership customers negatively impacted by the pandemic in March, including reduced rates on floor plan lines. Captives have supported their dealer partners in 2020 during widespread closures and subsequent losses, caused by COVID-19.