Once upon a time, automakers worried about horsepower. Now? It’s cash flow power.
In 2025, the auto industry isn’t just battling electric transitions and supply chain turbulence — it’s navigating a financing slowdown that’s stalling engines across the board. And for many OEMs and dealerships, it’s not inventory or interest rates that hurt the most. It’s late payments.
The Cash Crunch in Motion
According to S&P Global Mobility (2025), U.S. auto loan delinquencies hit 7.1% in Q2 — the highest in a decade.
Subprime auto loans are feeling the burn, climbing past 11%, while even prime borrowers show softening payment discipline.
Meanwhile, Cox Automotive reports that dealership floorplan costs have surged 48% year-over-year due to higher rates and slower turnover. Translation: cars aren’t just sitting longer on lots — they’re sitting longer on the books. For auto lenders, this isn’t just a bump in the road. It’s a full-blown skid.
The Financing Chain Is the New Supply Chain
Remember when 2021’s chip shortage brought production to a halt?
Today’s equivalent is credit stress. Dealerships now face a three-fold challenge:
- Rising delinquencies eat into liquidity.
- Declining trade-ins reduce collateral value.
- Higher rates stall new financing deals.
According to the Federal Reserve’s 2025 Consumer Credit Report, outstanding motor vehicle loans now exceed $1.56 trillion — a record high. Yet repayment confidence has dropped across all income brackets.
If the pandemic taught automakers anything, it’s that every chain is only as strong as its weakest link.
And right now, that weak link is the consumer’s wallet.
The Collections Blind Spot
Here’s the irony: most manufacturers and auto lenders treat collections like an afterthought — until it becomes the main event.
In a recent TransUnion study, companies that modernized their collections processes (using AI-assisted segmentation, automated reminders, and multi-channel recovery) improved repayment rates by 29% within six months.
In contrast, those relying on manual, reactive systems saw charge-offs rise by 18% in the same period. That’s not a small gap — that’s the difference between profit and loss.
From Engines to Ecosystems
Automotive companies are evolving from product-centric to service-centric businesses.
Connected car subscriptions, leasing programs, and digital retailing now represent recurring revenue streams — but they also introduce recurring payment risks.
For instance:
- The average connected services subscription faces a 23% churn rate (JD Power, 2025).
- EV lease defaults rose 2.7% year-over-year as residual values fell (Edmunds Data, 2025).
As revenue becomes more diversified, so does delinquency exposure. It’s not about selling cars anymore — it’s about managing cash flow on wheels.
The Receivables Advantage
At Caine & Weiner, we understand that collections in the automotive space aren’t just about recovering dollars — they’re about preserving relationships.
A customer behind on an EV lease today could be your next repeat buyer tomorrow.
That’s why forward-thinking auto lenders and OEMs now treat receivables like precision machinery: regularly tuned, predictive, and efficient.
Our data-driven recovery models integrate early-warning indicators, payment-behavior analytics, and strategic escalation paths to keep cash moving — without eroding brand loyalty.
Because let’s face it: no one wants their customer experience to feel like a repo lot.