The 2026 Auto Outlook: Solving for Affordability, AI-Fraud, and the New Tax Landscape

The automotive landscape is shifting rapidly through the beginning of 2026. To help lenders stay ahead of these changes, Equifax® recently hosted a webinar featuring Will Holleman, Vice President of Verification Services for Auto, and Barrett Teague, Vice President of Automotive Lending. They shared critical data insights on the current state of the industry and what to expect in the coming months as the "new normal" for auto lending continues to be defined by high interest rates, evolving fraud tactics, and that widening affordability gap.

While the challenges are real, the speakers also highlighted opportunities for lenders to adapt by leveraging better data and more efficient processes.

Key Takeaways from the 2026 Auto Outlook

• The Affordability Chasm: Total outstanding auto debt reached $1.7 trillion at the end of 2025. While delinquency rates dropped across most risk tiers, deep subprime trade growth is on the rise, representing 15% of all accounts.
   

• A New Normal for Monthly Payments: The average monthly car payment is nearing $800, driven by high interest rates and the rising costs of insurance, maintenance, and parts.
   

• The "K-Shaped" Economy: Lenders are seeing a divergence in consumer health. While top-tier performers remain strong, there is increasing pressure and mounting delinquency among those at the lower end of the credit spectrum.
   

• Tax Refund Season Surge: February saw a massive spike in activity, with inquiry volumes up 27% week-over-week. Interestingly, the average refund amount increased by over 8%, providing a temporary cushion for many borrowers.

• The $9 Billion Fraud Problem: Fraud remains a significant threat, with synthetic identity fraud and first-party credit washing topping the list of concerns. The advent of AI has made it easier for bad actors to generate convincing fake pay stubs, requiring lenders to use more robust verification methods.

• The EV "Off-Lease" Wave: Between 250,000 and 300,000 EVs are expected to come off lease this year. This influx of used inventory will challenge lenders to find new ways to value and finance electric vehicles for a broader range of credit tiers.

Watch the Full Webinar

This summary only scratches the surface of the deep-dive analysis provided by our experts. The full session offers actionable strategies for modernizing your lending workflow, including:

• Audit Your PTI Policy: Many lenders are still using Payment-to-Income (PTI) policies that haven't been updated in 15 years. The webinar explains why it’s time to re-evaluate these thresholds to account for modern hidden costs like increased insurance and maintenance.

• The Layered Verification Approach: There is no "silver bullet" for fraud. Learn how to layer alternative data with The Work Number® database to verify identities without adding unnecessary friction for your best customers.

Watch the On-Demand Webinar Here