The auto industry is continuously changing due to financial pressures, shifting consumer behaviors, and rising synthetic identity fraud, as well as auto delinquencies, so lenders and dealers need to adapt their strategies to better support customers while mitigating financial risk.
Auto dealers can better identify serious buyers while making dealerships more appealing to possible customers if they focus on making the customer experience more personalized. Additionally, auto lenders can help minimize financial risks while creating stronger relationships with their customers if they know which lender types are more vulnerable to delinquencies and fraud while understanding which lender type each generation prefers.
In 2025, auto industry trends indicate that the total outstanding balances for auto loans and leases are about $1.7 trillion, which is now higher than other non-mortgage consumer debt like student loans. Auto delinquencies have also climbed significantly, with Gen Z consumers feeling the greatest impact as they hold the highest percentage of auto loans that are delinquent for 60+ days. With all of the financial stress consumers are facing, vehicle sales have taken a hit while both interest rates and car prices have continued to rise.
Fraud continues to be a serious issue in the auto industry, with synthetic identity (Syn ID) fraud growing by more than 55% yearly since 2020. In fact, 2023 saw Syn ID fraud surge by 98%, leading to almost $8 billion in financial losses. Auto loans and leases with a risk of Syn ID have actually increased by 60% in the past four years, and these loans and leases are determined to have a delinquency rate between three and five times higher than the portfolio average.
Auto lenders and dealers who want to stay ahead in the industry must focus on understanding customer preferences while being proactive with implementing their fraud prevention measures to combat Syn ID fraud and delinquencies. Businesses that can reassure their buyers that they will get a seamless customer experience will be better positioned to obtain consumer trust and sustain success in the long run.
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