Dealers grapple with new registration requirements, ATPs rise

New identification requirements for vehicle registrations in Texas have prompted concerns from dealers and lenders about a potential increase in unregistered or uninsured cars on the road.

The Texas Department of Motor Vehicles in a Nov. 19 bulletin clarified that documentation required to register vehicles or renew registrations cannot include expired IDs and that passports issued by a foreign country must include documentation proving lawful admission to the U.S. The changes could hamper vehicle sales and lead to an uptick in illegally operated cars, creating collateral risk for auto lenders.

In the wider market, credit access improved in November even as average transaction prices rose. The Dealertrack Credit Availability Index increased 4% year over year to 99.1 as approval rates, subprime share and the share of longer-term loans rose. The new-vehicle ATP ticked up 1.3% YoY to $49,814, while incentives as a percentage of ATP was 6.7%, down from 7.9% of ATP a year ago.

High prices are prompting consumers to shift to used vehicles, with banks such as Huntington seeing the mix of originations also shift away from new cars.

Meanwhile, auto loan delinquency rates are projected to increase next year but the overall rate of growth is expected to slow. Auto loan delinquencies of 60-plus days are forecast to land at 1.54% in Q4 2026, up 3 basis points compared with the Q4 2025 projected rate, according to TransUnion. However, the percentage change YoY is expected to be 1.4% in Q4 2026, down from 2.6% forecasted in Q4 2025.

In this episode of “Weekly Wrap,” Auto Finance News Editor Amanda Harris, Senior Associate Editor Truth Headlam and Associate Editor Aidan Bush discuss trends across compliance, affordability and credit performance for the week ended Dec. 12.