Captive lenders still rule new car financing, electrified vehicle reliability improves, new Popemobile goes zero-emission

Hey everyone. Reminder: every edition of our CDG Newsletter is now available in audio format — recorded by me — for all podcast subscribers.

Here’s our latest episode to check out, and the best part? It's only FIVE MINUTES.

— CDG

Loan extensions for subprime borrowers are up 84% against 2019:

Two primary reasons for the sudden spike?

1) Disruption from Hurricanes Helene and Milton
2) And lenders are trying to keep loans “healthy” by avoiding repos / charge-offs.

But the downside is — in some cases — late-paying borrowers with high interest rates are racking up so much unpaid interest that their loan principal is barely budging for months.

It’s a fine line between relief and deeper debt.

(Data source: SEC via Bill Ploog)

1. Auto loan rates cool in Q3 as leasing soars

Experian’s latest report shows that while interest rates and monthly payments are stabilizing, subprime buyers are still struggling to secure financing as loan share continues to shrink.

• Captive lenders — those tied to automakers — remain dominant in the new car market but saw their share dip slightly as banks and financing firms inched forward.

• Leasing is making a comeback, particularly among Prime customers, with nearly a third of top-tier shoppers opting for leases this quarter.

The big picture: The post-pandemic lending market is improving, but it’s far from a level playing field … (Go deeper: 3 min. read)

2. EV, PHEV and hybrid reliability gaining ground on ICE

Electric vehicles are finally narrowing the reliability gap with gas-powered cars, according to Consumer Reports.

• EVs now see 42% more issues than gas cars, a significant drop from 79% last year.

• Hybrids, on the other hand, are matching ICE vehicles in reliability while delivering smoother, quieter drives, fueling a 53% surge in sales this year.

• Japanese automakers continue to dominate overall reliability rankings, though their slower EV adoption stands out against U.S. brands.

The takeaway: As automakers iron out EV and PHEV flaws, hybrids are emerging as the top contender for reliability-conscious buyers … (Go deeper: 3 min. read)

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3. The Popemobile goes electric with Mercedes-Benz’s custom G-Class EV

Mercedes-Benz has unveiled a custom all-electric G-Class Popemobile gifted to Pope Francis, signaling a sustainable shift in the Vatican's iconic fleet.

• While Mercedes-Benz has designed Popemobiles since 1930, this is its first electric model for the pontiff.

• The new zero-emission vehicle features a retractable roof and a rotating seat, aligning with Pope Francis's advocacy for climate change awareness.

The bottom line: With plans to transition its entire fleet to emission-free models by 2030, the Vatican's latest addition arrives just in time for the 2025 Holy Year, when millions of pilgrims are expected to visit Rome … (Go deeper: 1 min. read)

• VW workers step up strikes to fight German plant closures.

• Over 205,000 Honda SUVs recalled due to fuel leak concerns.

• Tesla decreases lease prices on Cybertruck.

• EV interest to near ‘tipping point’ as charging network grows, officials say.

• China has found a workaround for strict tariffs: heaps of hybrids.

Thanks for reading everyone.

— CDG