Auto lenders' business is great. Now what?

ORLANDO -- Business is so good for auto lenders, it actually scares them a little.

“If you ask me what keeps me up at night, I worry that the best day for us and for our dealers was yesterday,” said Nick Stanutz, auto finance group director at Huntington Bancshares Inc. of Columbus, Ohio.

“The fundamentals of the business are never going to get any better than they are today,” he said during a panel discussion at the American Financial Services Association Vehicle Finance Conference here.

Stanutz itemized business factors that already are souring: “Interest rates are going up. New-car prices are going up. Used-car prices are going down. There’s the possibility of new regulations. The consumer is more knowledgeable. Dealers are selling cars for less gross margin while making major capital investments.”

A separate panel discussion at the AFSA conference was dedicated to the question: Is this as good as it gets?

That panel, discussing the auto finance landscape, also noted some of the same threats but overall hit a more optimistic note than Stanutz’s comments.

For example, Dietmar Exler, vice president of Mercedes-Benz Financial Services USA, said that even though used-car prices are down from the most recent peak, it was a very high peak. “Even if they deteriorate slightly, we will take it,” he said.

Several auto lenders interviewed at the AFSA conference and during the NADA convention listed specific concerns about the future. Several said they worry that the Consumer Financial Protection Bureau could come up with new regulations for auto finance.

Another oft-cited concern was the possibility that the CFPB, the Federal Trade Commission, the Department of Justice and other regulators could get tougher at enforcing existing requirements for fair lending, for disclosures, for protecting customer data and so on.

As his panel discussion wound down, Stanutz qualified his remarks.

“When I said that about the best day being yesterday, that doesn’t mean it won’t be good,” he told an audience largely made up of lenders. “But the things you relied on to make it good today will change.”

That means lenders will have to adapt, he said. “If you can do that, you can be a very viable player five years from now.”