Chase Auto Finance CEO Thasunda Duckett sits on a stage between two people she considers tough rivals in the spirited world of today’s auto financing.

“The competition is fierce, especially when I look to my left and right,” she says at a recent J.D. Power automotive conference.

To her left, Tim Russi questions just how aggressive it is. “I wouldn’t use the word ‘fierce,’” says Ally Financial’s president-auto finance.

But many well-financed lenders are vying for a piece of the action in a hot market. Auto-loan outstanding balances total about $840 billion. Vehicle sales are expected to increase to nearly 17 million units this year, and the vast majority of car consumers buy on the payment plan.

“There’s a ton of money to lend,” Russi says. “The year 2015 will be interesting. Winners and losers will emerge in this space.”

On Duckett’s right, Joy Falotico, a vice president at Ford Motor Credit, says, “The landscape will continue to be very competitive.”

More than 75% of auto loans are indirect, or arranged at dealerships. That means lenders have two sets of customers: car buyers themselves and dealers who can influence which lender to go with.

“We want to make sure we work with our partners,” Duckett says of dealers.
Russi adds: “We’ll service on a dealer-by-dealer basis.”

“You need all the tools in the toolbox for dealers,” Falotico says.

In the marketplace, lenders tout innovative financial products and speed of their services.

But operationally, they must balance customer friendliness and quick decisions with risk management and lending practices that mitigate losses.

“You are looking for lenders to improve processes, be smarter and be faster,” Duckett says.

Compared with other credit markets, auto lending has performed well, even during the recession when mortgage defaults ran rampant. Many consumers with monthly debt obligations pay their car loans first.

“We have a highly efficient business model,” Russi says. “We don’t get enough credit for it.”

Today’s brisk vehicle sales are directly related to easy access to credit at reasonable rates, says Tom Webb, chief economist of Manheim, an automotive remarketing service provider.

He doesn’t foresee today’s pitched competition among lenders as creating a bubble. “At worst, it’s a bubble in formation.”

He adds: “Wall Street is throwing money at lenders, lenders are throwing money at dealers and dealers are selling cars. Will some people get burned? Yeah. But we learn from every cycle.”