Auto Lenders and the Rising Pressure of Borrower Payments

Higher auto loan payments are forcing borrowers to make difficult choices. For lenders, the challenge is recognizing when a customer wants to stay but can no longer make the numbers work. Early outreach can create more opportunities to preserve the relationship and prevent financial pressure from escalating.

Higher Payments and Longer Loan Terms Are Straining Borrower Budgets

The average monthly payment reached $765 for a new vehicle and $542 for a used vehicle during the second quarter of 2026, according to Experian. Average interest rates were 6.35% for new vehicles and 11.19% for used vehicles.

Borrowers are also taking on longer loans to make their payments more manageable. Consider a customer who has been comfortable with a $450 monthly payment. When it is time for another vehicle, that customer may find that the new payment is much higher.

That does not necessarily mean the customer wants to leave, it may simply mean the new payment does not work. Those are two very different problems!

Early Warning Signs Can Reveal When a Borrower is Struggling

By the time a customer declines an offer, stops responding or misses multiple payments, the lender has fewer opportunities to help.

The signs of financial pressure will vary depending on where the customer is in the loan lifecycle. During servicing or as the customer approaches another purchase, lenders may notice:

• Repeated questions regarding payments or due dates
• Failed or late payments
• Requests for payoff information
• Questions related to refinancing
• Reduced engagement before a loan or lease ends
• Negative sentiment during customer service interactions
• Previous hardship arrangements

One signal does not automatically mean a customer is at risk. A pattern, however, may indicate that it is time to start a conversation. Depending on the customer’s situation and the lender’s available programs, the conversation might start with a few questions:

Can the payment be structured differently?

Is there another vehicle that better fits the budget?

Would a certified pre-owned option make sense?

Is a payment-date adjustment, refinancing path or hardship program available?

Sometimes customer retention starts with recognizing that the original offer no longer fits and helping the customer find a more realistic option.

AI Can Identify At-Risk Borrowers, but People Should Lead the Conversation

AI can analyze account activity, payment behavior, customer sentiment and interaction history to identify customers who may be feeling financial pressure. It can also help prioritize outreach and route customers to the right team.

But affordability is personal. A customer may be balancing housing costs, medical bills, reduced work hours or other financial demands. An automated reminder cannot always understand what is actually happening.

That is where a well-trained agent comes in. A person can listen, clarify the concern and explain the available paths without making the customer feel like another account in a queue. AI helps lenders identify who may need support and why. Human agents handle the conversations that require judgment and empathy.

Compliant Outreach Requires the Right Timing, Channel, and Message

Proactive calls and texts can be useful, but compliance cannot be added at the end of the process.

Every outbound strategy needs to account for consent, communication preferences, timing, frequency, required disclosures and applicable federal and state requirements. Those rules should guide who is contacted, which channel is used and how the interaction is documented.

The goal is not simply to contact more customers. It is to contact the right customer, at the right time, through the right channel, in the right way.

Take a More Proactive Approach with AtPoint

Rising payments do not always mean a customer is ready to leave. Sometimes the customer is saying, “I cannot make this payment work.”

AtPoint helps auto finance companies identify and respond to these moments through AI-assisted insights, inbound borrower support, compliant outbound engagement and collections.

Speak with an Auto Finance Specialist

AI where it works. People where they matter. Compliance built into every outreach.