How Auto Dealers and Lenders Can Stay Ahead in 2025

The automotive industry is changing due to rising financial pressures and growing fraud risks. Auto dealers and lenders who want to stay ahead must understand shifting consumer behaviors and cater to their needs while implementing strong fraud prevention solutions and addressing delinquency issues. 

Providing a more personalized and seamless purchasing experience could encourage buyers to make their purchase at dealerships while allowing auto dealers to better identify serious, qualified customers. Meanwhile, lenders who can understand what their customers can afford and their preferred lender types can tailor the right services and build trust.  

Debt for auto loans and leases has risen significantly in the past 10 years, amounting to more than $1.5 trillion and becoming the most rapidly growing consumer debt segment that is not related to mortgages. Increasing auto delinquency rates, especially among younger generations, highlight the financial strain many borrowers are facing. This, coupled with higher interest rates and escalating vehicle prices, has caused overall car sales to suffer.  

Synthetic identity (Syn ID) fraud presents another challenge for dealers, lenders, and consumers. Syn IDs have increased greatly, particularly in recent years. Auto loan and lease applications with a high risk of Syn ID are more prone to delinquency at rates three to five times higher than regular applications.   

There is no doubt that auto industry trends are continuously experiencing changes in consumer behavior and financial risks, but prioritizing customer needs, leveraging data-driven insights, and carrying out fraud prevention measures can help auto dealers and lenders avoid serious financial losses and appeal to the right buyers.