Rising delinquencies and a wave of digital innovation are reshaping how lenders service auto loans and collectors tackle bad debt recoveries. Here are three themes that should frame every conversation at this month’s Auto Finance Summit 2025.
1. Elevated delinquency and default rates
The most critical operational challenge is the rising number of borrowers struggling to make payments.
- Financial burden on borrowers. High vehicle prices, elevated interest rates and lingering inflationary pressures on food, housing and utilities are straining households. Auto loan delinquency rates are at a 15-year high. Experian notes that refinancing is up nearly 70% over last year, in part to ease monthly budgets. More than 22% of new car buyers agreed to a loan contract of 7 years or longer in Q2, according to Edmunds.
- The pandemic-era portfolio. Some loans originated between 2020 and 2022 were for high-interest, long-term loans on overvalued vehicles. As used-car values decline, many borrowers are now underwater, which increases default risk and loss severity.
2. Digital transformation in collections
Record-high delinquencies collide with record-high borrower expectations for instant, digital interactions, squeezing lenders from both sides. But auto finance lags other industries on digital experience, even in the basics of user-friendly payments and information delivery.
The gap matters because communications and payments now sit on the front line of credit-risk management. Servicers that incorporate SMS, email and self-service portals report strong consumer adoption and improved revenue outcomes. ACI’s 2024 Speedpay Pulse found that younger and sub-prime borrowers actively prefer alternative payment methods such as debit cards and digital wallets.
Digital transformation is a strategic necessity to manage volume, improve efficiency and ensure compliance. Collections and servicing leaders are incorporating customer communication management (CCM) platforms to accelerate cash flow and provide a better customer and employee experience.
At the Auto Finance Summit, be sure to catch the Kickoff Fireside with Susan Sheffield, President & CEO of GM Financial. GM Financial ranked highest in digital experience satisfaction among captive lenders in J.D. Power’s 2024 Automotive Finance Digital Experience Study.
3. Need for flexible and borrower centric servicing
The high-stress environment requires collections to balance recovery with customer retention. There is a growing demand for more flexible and borrower-friendly servicing platforms that can quickly adapt to offer payment extensions, loan modifications or deferment options.
As consumer expectations rise, servicers must provide a seamless, digital and responsive customer experience, even during hardship. A negative or impersonal collections experience can lead to reputational damage and increased complaints.
How Nordis can help
Advanced CCM platforms like Nordis’ Expresso® offer a range of functionalities that simplify the creation, distribution, and management of borrower communications. Personalized and proactive communications, especially when coupled with digital and self-service payment options, are crucial to timely payments.
Here’s how cloud technologies can take billing and other customer communications to a new level of effectiveness:
- Design and launch omnichannel workflows including email, text, print, and interactive voice response (IVR) from one cloud platform. Companies can manage communications from anywhere, control versions, route approvals and automate delivery tracking.
- Personalize communications at scale using data-driven templates that adapt to risk tier, channel preference and hardship status, allowing for tailored outreach and loss mitigation strategies.
- Automate compliance by embedding advanced tools to automatically update disclosures and make other compliance changes at the federal and state level, ensuring all communication channels follow consent and data protection laws and maintaining detailed, defensible audit trails for all borrower interactions.
- Integrate seamlessly with AI analytics so that predictive scores trigger the next best action, be it a courtesy reminder or a flexible extension to head off the first default.
With delinquencies climbing, timely, relevant and compliant messages and payment communications are vital. Omnichannel communications and friction-free payment options aren’t just a customer-experience play. In the most challenging market in a decade, they are the fastest lever auto finance collections and servicing professionals have to reduce roll rates and protect portfolio performance now and in 2026.
