Equifax Encourages Dealerships to Leverage Data as Auto Market Faces Headwinds
AMID AUTO MARKET HEADWINDS AND RISING CONSUMER STRESS, data-driven insights—not instinct—are now the critical path to sustaining profitability. Equifax outlined this data-first, AI-driven strategy for dealership profitability at the recent National Automobile Dealers Association (NADA) show, where Emmaline Aliff, Advisory Leader at Equifax co-led a workshop entitled “Driving Profitability with AI in a Shifting Economy.” The assessment from Equifax of the macro environment and auto credit market underscores the urgency for dealers to adapt to the shifting landscape. The market is defined by uncertainty and mounting consumer stress, with key macro themes including the unpredictable impact of trade and fiscal policy and inconsistent hard and soft economic data, making forecasting difficult.
A primary headwind is the increasing cost of vehicles. Data¹ reveals that tariffs are expected to result in a 4-8% price increase for all vehicles, both new and used. This translates to an estimated average cost impact of $5,000 for all imported vehicles and $1,000 for U.S.-assembled vehicles. Furthermore, the market faces challenges like stubborn core price growth amplified by tariff and labor market stresses.
Against this backdrop of rising prices and economic pressures, the consumer credit landscape shows both activity and elevated risk. Auto loan and lease originations are trending upward year-over-year, even as interest rates become less favorable. For new cars, average annual percentage rates² stand at 7.3% for prime and a challenging 14.6% for subprime borrowers. For used cars, rates are 9.6% for prime and 10.2% for subprime. While balances are increasing across all asset classes, so are delinquencies.
"We're seeing auto delinquencies not just back up to pre-pandemic levels, but close to what we saw during the Great Financial Crisis,” Aliff said. “But even with all that pressure, auto payments are still a top priority for subprime borrowers—they're really fighting to keep their transportation. This combination of high rates, 'sticky' vehicle prices and rising credit risk means dealers have to be sharp. It’s vital they can pinpoint opportunities and mitigate those losses effectively."
Aliff added that the strategic path forward for dealers is to start by picking one high-value profit lever—such as retention, service or lead scoring—and use AI models there first.
The roadmap to dealership intelligence emphasizes:
-
Unifying disparate data sources: When data is "trapped" in silos, opportunities vanish. Unifying data means centralizing all data so that every system in the dealership knows the complete story, allowing the entire operation to move faster.
-
Leveraging models for the dealership's specific market: Focus AI on high-value profit levers, such as service, retention or lead scoring. For example: AI can flag at-risk drivers due for tires or brakes before a major event like a snowstorm, enabling targeted text messages that lead to service revenue in a matter of days.
-
Acting swiftly on AI-generated insights: Dealers don’t need more reports—they need better timing. AI finds opportunities fast, providing clear signals for teams to act on, especially for leads that are "mistimed" rather than lost.
-
Scaling the measured profit gains across the organization: By connecting data and acting on AI insights, dealers have seen real results that can be scaled across the organization, including faster close rates and a significant optimization of the sales cycle.
The ultimate conclusion for the automotive industry is one of transformation. The market has shifted, and a dealership’s data is now its most valuable, untapped profit center. Those who hesitate to leverage AI to unify their data and generate timely, actionable insights risk being outpaced by competitors who are training their systems today.
To further support dealers, Equifax recently launched its Employment Insights solutions. Delivered alongside the Equifax Consumer Credit Report, these offerings use verified employment and income data from The Work Number® to give dealers a more complete financial picture of the buyer. This allows dealerships to move beyond self-reported data to quickly verify a consumer's purchasing power during prequalification and validate application information during the final financing stage, ultimately helping to reduce buyback risk and accelerate the closing process.
Learn more about how Equifax drives AI innovation here.
Sources:
¹ Cox Automotive: Industry Insights and Sales Forecast, September 2025
² US News: Average Auto Loan Rates in December 2025
(c) Equifax Inc. 2026. All Rights Reserved. For information purposes only.