NAF 2023 Conference Recap

NAF 2023 Conference Recap Informed

The National Automotive Finance Association’s (NAF) 27th Annual non-prime auto financing conference took place in Plano, Texas, June 7 – 9, 2023. The Informed team in attendance at our exhibit booth included Jessica Gonzalez, Director of Lending Strategies, Rachel Fromholtz, Account Manager, and Kartheek Veeravalli, Head of Auto Product. They reported fantastic conversations resulting in great insights from the auto finance community.  

This conference is designed for the non-prime auto finance community. Finance company and bank representatives at all organizational levels and auto dealer principals were in attendance. We were pleased to see so many of our partners and prospective partners. It provided a great opportunity to “catch up.”

In a session led by Jonathan Smoke, the chief economist at Cox, he analyzed the state of the auto market and shared his outlook. He highlighted the state of the economy, strength of the travel segment, job market conditions, and concerns surrounding vehicle affordability.

Economic Outlook

According to Jonathan Smoke, the risk of recession is declining, but economic growth is expected at less than 1%. He believes the weakest quarters will be the next few, with the third quarter being particularly telling. Despite this, the travel segment remains strong, indicating positive consumer sentiment.

Growth in the Auto Market

Vehicles, as a broad category, continue to experience growth. However, this growth is primarily driven by servicing and down payments, rather than overall sales. While the market is improving, it is important to consider the underlying contributing factors.

Job Market and Inflation

The job market is currently strong, which is a positive sign for the economy. Additionally, inflation has decreased, leading to lower gas prices. However, it is worth noting that consumer price index (CPI) has had a significant impact on the lowest income category, despite strong wage growth for service and front-line workers.

Household Savings and Cash

One encouraging aspect of the current economic climate is the elevated level of savings and extra cash across households. There is approximately one trillion dollars in excess savings, providing consumers with the ability to make cash purchases, such as buying cars outright. This surplus indicates a potential boost in consumer spending.

Delinquencies and Affordability Concerns

Although we’re seeing elevated delinquency rates, they have not yet resulted in elevated defaults. The default rate remains relatively low at 2.6%, compared to 2.9% in 2019. One reason is that employed borrowers prioritize this type of debt. However, a significant concern is vehicle affordability. The average payment has increased from $400 to approximately $550, pricing out a portion of the market. A decrease in interest rates and vehicle depreciation may be necessary.

A later session titled “An Assessment of the Industry and How to Effectively use the Data“ covered the latest legal insights.

Latest in Legal

There was robust conversation around the future Supreme Court ruling on whether the CFPB is funded constitutionally, which could take until July 2024 for a decision. And the panel reviewed last fall’s CFPB supervisory highlights. These highlights include trends the CFPB is consistently seeing in their exams.

  • Overcharging for add-on products at early payoff (focusing on when someone pays off a loan early), the payoff amount excluding refunds mostly due to GAP. In this case the finance company should have applied the refund to the account. 
  • Misleading customers about loan modification (for example telling the borrower that if they make all their payments, they can get a modification. The borrower makes their payments and then is told they do not qualify for a loan modification).
  • Borrower double billed for insurance (usually due to force placed insurance)
  • Junk fees (for example the RISC says that a late fee will be the lesser of $25 dollars or 5% of the delinquent amount, but the finance company always charges $25)


While the auto market is experiencing some positive trends, such as growth in servicing and down payments, a strong job market and decreased inflation, affordability remains a pressing issue. With the average payment rising and a portion of the market being priced out, it is essential to monitor interest rates and vehicle depreciation to ensure continued growth and accessibility. By considering these issues, industry professionals and consumers can make informed decisions. And they can join in the knowledge sharing with industry professionals at conferences such as NAF’s Non-prime auto financing conference. Until next year, because we will definitely be back!

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Rachel Fromholtz Account Manager
Rachel is an Account Manager for Informed.IQ. She has more than 15 years of business management experience with a strong background in the technology and financial sectors.

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