Tariffs, Terms and the Evolving Auto Finance Landscape

0:04 Hi everybody. This is Lynd Soderbil of Upstart, and welcome to another episode of Leaders in Lending. I'm joined today by Melinda Zabritski, who is the head of Automotive Financial Insights and Experience, and Mark Pregman, who is a VP of Consumer Lending for USAA. Thank you both for joining us today. Happy to have you here. I think Melinda and Mark, i'd love for you to just, you know, give our listeners a little bit of a brief intro about your backgrounds and kind of how you really became leaders in the lending sector. Great, So, Melinda Zabritski, I've been with Experience going on. I actually just completed my twenty first year here and I've kind of started more in the product development area, really focused on lender oriented you know, data products, mostly around industry trends and what we're seeing happening in the industry.

0:53 And I started putting together a regular quarterly presentation on state of the automotive finance market and have wrapped up my up in the second quarterly presentation getting ready to start number seventy three. So really just focusing on what are we seeing in auto finance. And I'm Mark pregnant, so a general manager of consumer lending at USA thirty plus years in the industry, so banking. My whole career right out of college started with SunTrust, which is true as spending today. I was a buyer on the desk by an automobile paper, calling on car dealers selling our products and services. But I also have experience in other asset classes like home equity, credit card, small business lending. So my whole career basically has been what I would call consumer lending, not really commercial lending, although I have some experience in that. My ninety percent of experience have been lending to consumers. And so I think twenty four years at Tourists, in nine years at P and C Bank, and now here at USA for almost five.

1:53 Wow, so great. I think between the two of you, you've certainly seen a pretty significant changes in the auto end history with the rise of electric vehicles and and many other shifts between domestic and international production. And who's kind of winning the race at any given point. I think the interesting thing and kind of everyone's hot topic right now are the tariffs on many products, but particularly on auto imports and auto parts. And so I've actually even seen some marketing emails from dealers that are near me that I've bought cars shop in the past, that are. Saying, hey, it's on our lot, come by it. These things are terror free for now.

2:33 So you know, certainly very disruptive to a lot of industries and a lot of change to navigate to right now. So how do you see this playing out in the near term with manufacturers and dealers, and then how do you see that kind of impacting the consumers and the affordability of those of those cars. So I will start Melinda and I did a presentation together Consumer Banker Association with CBA Live. It's a three week weeks ago. Now Melynd don't lose the track of time and terrors for the hot topic because they hadn't started yet. I would say that anybody that was the key word, key phrase we heard, any big intelligence, they know what's going on, what's going to happen. They're lying to you. They have no idea althothough I will tell you since Lynda and I spoke to it at the CBA Live, I have a little bit better handle on it today because things have transpired, things have happened, and I see that automobile industry, and the manufacturers are adapting.

3:29 They're trying to figure this out as well. And we're seeing like Audi's leaving their cars at the port. They're still delivered, but they're not taking delivery of them. We're seeing the car dealers they're trying to push like you got the email that they're trying to push sales. Now, we're seeing an increase in our application volume. And I was actually listening to sales calls at USA. They require us to call y Cording, and what we do is we listen into our service reps, whether they manufactor make a loan, sell alone, or collect alone. We listen to the whole life cycle to try to improve that experience for our members. And I listened to some sales calls and they were I'm trying to get in before the terriffs. I heard that come through while they were taking the application. So I think we're probably pulling some demand forward. How it all levels out, I don't know, but I also think, you know, the rhetoric on the terrorist is kind of toned down a little bit with some pauses announced here lately, so who knows what's going to happen. But I don't think this gonna be as negative it was when Milan and I were talking about this three weeks ago. So on manufacturers and the dealers, well, they're adaptive. I mean they even as adapt it's going to be a car dealers, Linda.

4:31 I don't know your take, but but we're seeing increased demand. Yeah. I actually just wrapped up last week to additional conferences, and definitely this is the topic that everyone's talking about. I saw some presentations from some economists that were trying to estimate what they expect the stars to be, and they were definitely reduced from what I had seen previously. You know, anticipation of potentially reduced manufactur sharing profit, so you know that that's something that I think that that is still kind of up in the air, you know, I think everyone pretty much agrees though that you know, there will be an impact to affordability around you know, loan amounts, and you know they're already extremely high, so we can anticipate that going higher. And then of course there's the anticipation of as prices increase on new and very likely hit record peaks, shifting more consumers into used vehicles, which are already at a little bit more of a tight supply and that causing even perhaps more of a ramp up demand for used and potentially increasing those used values as well.

5:39 Sure, and that's actually a topic that kind of hits near and dear to my heart. I have I have three kids, and two of them are drivers and out of the house, and one is about to be a driver within the next year, so I will be in the market for a car, and my middle one was kind of in need of a car right about that the last spike in the used vehicle market during COVID, So probably going to get hit twice twice by similar economic factors, you know, with the vehicle prices you know, still elevated even on new cars and use cars, and potentially increasing on us KUIs with lower supply, do you see lenders of adapting loan term structures to address that affordability?

6:22 Yeah, I would say from a lender perspective, you're seeing that across the market. It hasn't changed drastically because I still think the consumers they may see that that seventy two month or the eighty four months out there, but they're looking at the rate they have to pay. It really just comes down to a payment. I think that's they're trying to back into a payment. But we are seeing I think that Melinda you shaid, I think it was like twenty percent of the Marcus three twenty plus percent is now seventy three months are greater. But the interesting thing, the average amount average term on the books for a lender like ourselves is sixty eight months. So it still has it changed that much. May have got up, like from sixty six to sixty eight, but it hasn't changed that much. So I think that there are we're we're I think that we're seeing that focus out there, but a lot of the consumers just aren't taking those longer terms.

7:09 So yeah, and that and the majority of financing it really is seventy two months and above, you know, with mostly right at seventy two and yeah, those averages, you know, right around the sixty eight months. I think some of the things that we're seeing on this is if you think about it, you know, term really is the only thing left to adjust to bring the payment down. You know, if rates don't come down, loan amounts are going to be going up. Term is really the only thing to pull. But then again, you know how far out will lenders go. I mean, there are lenders out there that do specialize in things like ninety seven plus, you know, so you do see that. Then of course there are much more conservative lenders that don't do that. But I think ultimately yet, you know, is term going to get even longer? You know, who knows? You know, what happens if we increase you know, increase loan amount by four or five thousand dollars, you know, without pushing, that has a considerable impact on that monthly payment.

8:03 I mean new car payments right now, we're already starting to see so far in Q one, like around seven to fifty a month, and add a couple grand on that, you're in the nine hundred range. And I mean we already do see you know, fifteen sixteen percent of new car payments are over one thousand dollars. And that doesn't mean it's a you know, luxury vehicle. It just means it's a forty thousand dollars vehicle at eight percent rate for you know, sixty or seventy two months. Yeah, and I'll put some respective on that too, because I've been in this bus, like I said, thirty plus years when I was a buying paper from car dealers on the desk. We were moving from forty eight to sixty months, and we thought the world was going to come to an end. We really they were like, oh my gosh, the sky's niffe and it didn't. Okay, And I think consumers adapt and they're smart. But I also think too, is that cars are lasting longer today than they were back then when I was when I first got into the business, Like, you know, cars you really had to worry about is this going to go one hundred thousand and two one thousand miles? Right? And today with the the quality of the cars being manufactured that that's not an issue like it was before. The term has had a lot to do with the useful life, right, and so today it's with cars lasting longer and consumers driving them longer, right, that term I don't think is as big as it was before because it still has useful life.

9:17 Sure, it's an interesting point, ye. I think that's You can certainly see plenty of cars on the road that have been around for a long time. You maybe wonder a little bit how they're still running. And whenever you hear a noise with their own carer like that one's out here, so I'm sure mine is fine. What you know with the you know, other changes in kind of the macroeconomic environment over the past year or so, you know, rising inflation, higher home prices, sustained higher interest rates, not interest rate cuts not being as deep as is maybe we would have forecast. By this point. Are you seeing any notable changes in delinquency rates or or even just kind of you know, people who are slower to pay, or or changes autopay where people may have been much more confident in their cash flows in the past.

10:04 I'll let Blinda, I'll let you answer that that was the topic of discussion a couple of weeks ago, and then I'll answer it from our perspective as well. So let don't you just maybe talk to the general market. Sure, yeah, absolutely so over the last couple of years, Yes, we have definitely seen delinquencies increase. The majority thing that we tend to track is going to be sixty day delinquency rates, and they certainly are increasing. You know, from a sixty day rate, we're very similar to the peak that we had back in two thousand and nine. I think some of the big differences we're seeing, of course, are you know, used values are still strong. So if you are repoing and you know, take sell on that card of the auction, sometimes the deficiency balance is it a little bit better. The area that I think we're seeing that that has get more focused on it has been some of the increased delinquency more in the near prime space. You know, credit scores six to six hundred to six sixty. You know, those delinquencies are increasing at a bit of a faster pace. But at the same time, the increase of delinquency went hand in hand when all of a sudden, you know, used values jumped up forty percent, new car prices you know, increased thirty forty percent, and those payments went from four hundred dollars to like I said, seven hundred, And that definitely has had a result in those rising delinquencies.

11:19 And I would agree and tracking the industry that you've seen a rise across all credit spectrums, whether it's prime, super prime. Super prim really hasn't gone up that much, but it's been more than the near prime and the subprime is where that and so those are all up and also repossession rates are up to as well. We're singing that as well. But for us, we're a little unique. You say, we are up, but we are not even close to the industry. We're still tracking better the industry. A lot of that has to do with our membership. Is that about fifty little bit or fifty percent of our members they get along for us, have a government paycheck, so they their active duty, they're retired there, you know there, and it's a lot of them are dual income, so that I did my twenty years in the service or retired to get my military paycheck coming in, and I'm also reservist, but I'm also you know working on the local police department as well, So we got a little bit of that more employment stability. So I kind of expect that out of our book and how the how it performs.

12:10 Yeah, that's a yeah. I think that's a good point about especially the potential like retire after in a twenty twenty five years of service and you're still you know working and of working age to take on kind of a second career in the private sector. Uh. You know, as you think about then, you know. Cars becoming more expensive and potentially more delinquencies are you seeing I know we're seeing in the data and increase in auto interested auto refy and refine those loans, maybe not necessarily for a better rate, but to extend that term, lower the payment, kind of reamortize it again, Are you seeing that as well in the information you're reviewing. Yeah, so we actually having an increased loan demand on that. I think it's I think it's the refi wave has got delayed a little bit and just my experience, just in my opinion, because rates aren't measured down. I mean they're down, your average plays down that more than than it was last year, but it's not meaningful enough because I still think the consumers looking at my cash flow, my what's my monthly payment? Right? And so I don't think it's that advantageous for them now. Is fifty dollars big for some consumers? It is for some consumers, it's not right. So I think there's a little bit of that.

13:18 But we have seen a pick up. In matter of fact, I've talked about that why courting. I listened to five calls and two of those calls were refinances from another institution and we had a better rate and it was a meaningful difference for them, and we didn't advertise that. They just on their own volition came to it, So I think it's in their minds and so, but I just don't I think the wave is kind of pushed off because we're expecting more rate decreases this year. Now it's two now, it could be more if we go into recession. Who knows, but I but I know it's on their minds just because of inflation and cash flow and stuff like that. So, Londa, I don't know what you're seeing. Yeah, Actually we joked about this at CBA because I got my USAA auto loan reef I offer not too far before, not too far in advance of the CBA, being a USA member myself. But we do track for membership.

14:06 By the way, you are very. But we do track and look at what we're seeing happening and REFI, and yes, there's definitely REFI occurring. It's not nearly as much as what it was when rates were really low, you know, in twenty twenty and twenty twenty one. But in what we're seeing as what you just mentioned is you know a consumer who maybe booked a seventy two month loan or you know, sixty five on average, and then eighteen nineteen twenty months into the loan, they're now refinancing again, So going from a seventy two month loan to a sixty five but after already paying you know, eighteen months and we are seeing in general about a sixty six dollars payment savings, you know absolutely it will have that consumer paying more over the overall life of the loan. But again, if it's dropping that payment sixty sixty to seventy dollars and they're able to stay current on that loan, you know that that's definitely a good thing. But obviously, yes, they're going to pay more of the overall life alone. But if rates come down, we do expect refin to pick up a lot more.

15:09 And we do a lot of education to our members on when is the right time for you, because you're right, if you're twelve months in and you and you're you do a sixty month loan, and you do another sixty month loan and refinance, you'd essentially get to send me two months, right, And so you got to look at the total costs. So we try to educate them. But I will tell you that a lot of just in general, consumers are a lot of just manage their household cash flow and when you know, we still of that inflation we're dealing with, and then who knows you Like we talked about terrorists what the impact might be on other consumer goods out there right that may happen. So I think it's I think it's on their minds and we're seeing an uptick on it. Not the wave that we thought it was going to be though, sure. But maybe maybe just more consumers instead of like people being more advantageous about rates because there's not as much margin there people who need the free cash flow and maybe you're paying a little more long term, but are making their day to day month months more affordable if they're a little more Yeah.

16:01 I also think too, it's a little bit of an I don't know like ego things the right word, but how people compare your Fyco score? I was planning golf, get a couple of who my buddy goes. I know you're packing. What's your Fyco score? I guess is my higher than yours? Right? And I think people going what you get on your car? Well I got nine percent? Well I got seven. You know then you feel like, oh I got to go out and get seven. Now you know what I mean, so I think it's one of those things that's just like, but I really think it's going to come down to is it worth their time and effort to refinance and is it going to make a difference. I think anything where fifty dollars can be meanful for a lot of consumers. Yeah. Absolutely, It's funny we're talking about this. The score comparisons totally isn't aside. At one of the conferences last week at the evening reception, was hanging out with a couple of clients and or just industry folks, and they said the same thing. They sit there and compare their scores, and they both whipped out the Experience app and were like, see, see this is my score. Mine's better than yours.

16:52 Yeah, that is funny, and it is. Everything's a little bit gamified today. So well, you know, I know, like obviously there's a lot more I mean, there's a you know, a pretty solid trend for a while of people buying SUVs and bigger SUVs, and even though they continued to go up in price and many of them hit the one hundred thousand dollars mark and more, you know, what are you seeing on kind of trends and car buying behavior now over the past year and you know into twenty twenty five, particularly around like SUVs and then electric vehicles, which I know, you know, depending on the manufacturer, have been have grown at different rates. Like frankly, I had an Audi EV for a few years and traded it on a kind of went the opposite way. It went to a full size Ford Bronco from an EV after a few years.

17:46 I could see using an EV in the future too, but it really needed the suv space at the time. So just are you seeing that any trends in buying behavior there. It's it's definitely an suv market. When we look at the kind of vehicles, especially on new cars well used cars too, that consumers are purchasing. The majority of the market's the suv over sixty percent of new vehicles or SUVs. And it's not necessarily the luxury The biggest volume are really the non luxury SUVs. It's the CRV, it's the Raft four, you know, it's the Hyundais. So it's really you know, that non luxury kind of small to mid size suv that really dominates what drives the market. And of course as new cars really switched over to SUV's a handful of years ago. That's what the used cars are too. Of course, on the U side, you know, you've got a lot of the F one fifties, so it's a lot of a lot of pickups and then those SUVs. It's interesting on the EV front though, because just as Mark was mentioning, kind of you know, a ramp up of people rushing to the dealers to get the car pre tariff, kind of the same thing I believe is happening in the EV space about potentially you know, losing the tax thread and the subsidies, because we saw so far in Q one and EV's are almost ten percent of new car purchases, and we ended last year lower than that, like eight to nine percent. So we've definitely seen a ramp up. And what was most notable was, you know, last is leasing on EV. You know, last

19:18 year we ended you know, around forty percent of EV's released. We're almost at sixty percent right now for Q one. So I think there is that rush of people who are in the market for an EV or interested in getting an EV and getting it while they can still take advantage of that least credit. I would say, that's a good point. I also think getting back lou Itt to terraffs, I actually think EV's will be impacted more because just because of terrifs in general, right, and because we're the parts of manufacturers. But the prices will even higher because the incentives are going away from the federal government. Right. So I think the pain that the price shock will be higher in the EV. So who's to see what's going to happen there, but because I think it's gonna hit EV's harder. On the suv, we tracked just like everybody else. The number one of truck finance f one fifty, that's our number one financed.

20:06 We're seeing that. I think that you've seen manufacturers are dropping cars now. Passenger cars are going SUVs and trucks and stuff. I think the same thing I just taught about with the term and cars lasting longer, those SUVs have gotten more economical because they're getting better gas miles day. I remember back in the two thousand and early two thousand, we had that recession when the card was asking and set us to buy cars right there, pushing and the suv sales went that. Yeah, remember that cash for colluctors and then and then suv sales, I mean dropped off the cliff because gas prices were like double and then all of a sudden, gas prices went down and the SUV's I mean, it was like, didn't you learn your lesson? It's like, you're still going to have that issue. But I think so, I don't think this is susceptible to gas prices like it was before. And yeah, but but yes they are expensive and so but I think also too, those passenger cars, like those luxury cars, they're dropping their entry levels now because they just want you're going to get the fully loaded and the top of the line.

21:02 And so it's a little bit of a give and take on that. But we are seeing, you know, the more on the suv just because it's I think is a more if you get a growing family, those types of things. And once you get used to driving an suv, it's very hard to go back to a sedan. I have found. So I've tried to do it now twice over and over the past probably twenty years where I had an suv for a period tried sedan, I've made it. I think the longest was my My EV, My Out of EV, which made it about two years. But I also work from home, so I don't drive it a lot. And we also had an SUV during that period that was my husband. So no, and I'm the same way. I went from the largest I had an expedition and it wasn't worried about Gasmas for me, my choices. It was just too big because kids were gone and they're they're they're on their own now. So I went to Fort Bronco. It's smaller, but it's still an suv, right.

21:50 I wanted to space as really Yeah, because it fits in my garage. Oh because yeah, I know. I I will say my Bronco takes up a lot of space in the crash, So I have a. Pretty tall, big one and it fills fills the space out there. Uh you know. But one thing I do want to bring up if I can, So when we when we start talking about how so much of the market is moved to SUVs, you know that does have the definite spillover impact into the used car market because one of the other trends we're seeing that kind of ties to the affordability and you know, the overall economics in the industry is because more of the used inventory r SUVs. It is pushing more consumers into older vehicles too, in order to get to a more affordable payment. So you know, like nine ten plus year old vehicles. You know, we're definitely seeing an increased demand for that.

22:40 And that used to be luxury, right, you see that more in luxury if somebody got a nice antique mercee or something like that. That's not the case today. It's just it's affordability. And I'm gonna try to get SUV and I have to go that back far in year to get to fill my needs. Sure, And then you know, in switching back to electric vehicles for a minute, maybe both mentioned the longevity of the cars lasts longer, so potentially longer longer terms could be could be in the horizon. But still I think some concern with the EVS on battery life and then what that means and the cost of replacing those batteries if they if they die on the car. So you've got less maintenance and regular maintenance. But but that's a pretty big potential risk to to your electric vehicle. What unique challenges do you see in auto financing around things like residual values and and UH and the charging infrastructure and lending for an electric vehicle.

23:39 Well, let's yes, we don't lease, but I do know that as a concern, I think it's keeping a lot of buyers out of the market. On ev about Hey, I got to really I got to put in four thousand and five thousand charging in the microags right on top of that, or I got to take it to the grocery store and charge it up on your grocery and w't get a full charge. Those type of things. So most of it, I'll just tell you my experience. My I circle closer. It's your third car, it's not their primary car, or they're an urban dweller and they live in where they have other modes of transportation to get to the airport, you know, or that kind of thing, or they But I just so I think that's still there, and think about we talked about this at the CBA conference. Was a lot of those buyers too. They are on the sidelines. I live in an apartment complex and there's nowhere to charge it, right, So it's just that. So I think that once the infrastructure comes together, and I think it's just I think it will naturally take off, just like we went from horse and buggy to a combustible engine. The government didn't mandate you had to get off the worst and buggy to a car, right. And I think that if the market force is right, supply and demand, the right things come together, like infrastructure longer, charging, you know, longer, I think, then the man will start to pick up. Price points will come into play. I think once that that starts to get worked out, the market forces will work and I'll think we'll get some type of equilibrium there.

24:55 Yeah, And you know the point around residuals. You know, there's a lot of questions around that with you know, price drops that occurred among several manufacturers and what will that used car value be when it comes back. And I think that's also why we do see so much leasing. I mean, like I said, when I'm looking at the EV space right now, it's almost sixty percent leased, loans on only a third and the rest of it's cash. So, you know, I think leasing definitely has that comfort level from a consumer standpoint in knowing that, hey, your lease is up twenty four months from now, thirty six months from now, you can you know, go and return it and go back into another vehicle. So I think there is definitely that comfort level. And one of the comments that has come up over the last several conferences I've been at, especially around EV, is you know, no single vehicle, whether it's an ICE, an SUV, a Sedana convertible EV, no single vehicle will be perfect for everybody, nor will it meet you know, one hundred percent of your driving needs, you know, so you find the one that fits the most.

25:54 And Mark's point frequently it's a second vehicle. I agree. I think the lease is attracted just because of it's a payment issue, but I also think too when we actually go and talk to our members and ask them about their carbine experience, what they did and what they end up doing, a lot of them I choose the lease because I'm not sure if I want to live with an EV for the you know, for five years, I'll do it for two see that I can make it work. So I think that's a big part of the lease. In the sixty percent plus of the market's leasing for EV, I think it's like I'm not committed, right, So it's like I'm kind of partially dating, right kind of thing. I don't keep my options, you know. So yeah, I made it two and a half years, and I do believe I'll own an EV again. I liked it, but again I'm that person. I live in the suburbs, I have a garage. I have the charger in my garage so I can plug it in when I was home. If I go into our office, the garage in our office has charge a road chargers. I can charge it either place. And definitely more of a challenge.

26:53 I think the road trips and the infrastructure to get from here to there and to not have to sit and wait is certainly potential obstacle. And we were kind of that bucket too, where you know, it was my car, but we had a large SUV that we could also drive that was more of our primary, primary family car. But I am really hoping that the infrastructu improves because I would love to have another one. And in the middle of winter in Ohio, it's really nice to never have to go to a gas station. Yes, it is, I would agree, Linn. I would add too, I think, you know, for the consumers are, but they're not there yet. A true plug in hybrid. I think that which gave the option i'd go one hundred percent electric or I can do get do that long trip to see my family in two states over and not have to worry about And as great as I'm all electric and I'm going back and forth to work on my daily chores, but when I want that line, I want that true plug. But I mean that the longest hybrid now is going like what forty miles on electric and then has to go over to gas. And so if that gets out to the two hundred three hundred on a true hybrid plugin, I think that would generate demand.

27:53 I really do. Now. I think that's that would be a great, a great new option to have. So you know, as you think about then, you know, we talked a little bit about the tariffs and UH supply and demand of what that may look like for both new and used cars with rates you know coming in during COVID, certainly a lot of supply chain chain disruptions across every industry UH, and the price of used cars UH spiked through the roof. You know, inventory levels aren't necessarily fully back to normal. And then you know your comment. I think Mark was interesting about you know, Audi leaving cars at the port in Maryland and not even moving them UH to dealerships because they don't have buyers at the moment. But how are you seeing that play out with just the inventory? Uh, any supply chain disruptions you're seeing because of the tariffs or or related to other events going on globally, I.

28:46 Think it's too soon. That's supply chain disruption. I heard a couple of the auto analysts out there, you know, on some of the on some of the business updates, it's going to be six months until we start feeling the impact. I think it's a longer than I thought. It was. Four to six months, depends on the brand to make four to six months, It depends on where they're getting their parts from. But I just I think it's going be six months. Hopefully we'll get this stuff wrapped up before then so it doesn't make kind of an issue. That's what I'm hoping over market. Yeah, and I think there will be some short term things, but not as I don't think it'll be as deep as we thought it was going to be. But if we blow through that six months, that's when I think we'll start to see it could curb demand and pricing.

29:29 Yeah, all right, well, I definitely appreciate you having it on I think one last question that I'd like to pose to each of you to kind of close this out today. Forward looking, you know, obviously a lot of uncertainty, lot of variability, things that are crapping up in every area that maybe wasn't on the on the BINGO card for twenty twenty five. But I like each of your perspectives and what you see is maybe the top market or regulatory shifts on the horizon that banks and lenders should really be thinking about and tracking as they plan their auto finance strategies for twenty twenty five or really for the rest of twenty twenty five, since we're a quarter in already.

30:12 Yeah you, Linda, Yeah, I just. I think right now, like well, like we said earlier, there's so much uncertainty that I don't think we can anticipate or really know what we can expect to see. I think people are just you know, from an mark you can certainly speak better to this, but I think lenders are just kind of putting more of the guardrails around, keeping an eye on, you know, what are what are the latest data trends, what's the latest information you're hearing from dealers, what's the you know, the latest data points that we're getting from the variety of data sources. But everyone, I think wishes they had that crystal ball. But things are changing so quickly and the forecasts are changing so quickly that I think there's just really still a lot of uncertainty as to exactly what we're going to be seeing this year.

30:56 Yeah, I'm and I'm less worried about regulatory and governmental now with the administration we have. I mean, there are things are thinker rolling back, so I'm less worried about that. I'm more worried at the macro environment. I mean, it's just the uncertainty there. I think that's more and what the impact is. So we're we're putting together a playbook. So if this were to happen, what's to happen? What are the canary and the coal mine kind of metrics we want to monitor, Like we start seeing even before they walk into the dealership. Are they is the research for what's my car worth? What's the new car going to costly? Is that going down right or is it going up? Is it staying flat? Before they hit the dealership, we're talking to dealers, staying close to them, even though we're a direct lender. What goes on there is really important. They're part of our ecosystem and we're just trying and then the health of that of that consumers that go through there and they're making their payments, and so we are.

31:43 We've ready to tell lenders if advice is make sure that you have the best experience, because the best. And then if through the whole life cycle, through making it loan service it alone, make it easy to change their their due date, make it easy to change their payment amount, whatever they want to change things. And then when you have to collect them, when you make it easy to get a hold of you so you can make arranges to get them through that time. I'm more focused on that than I but but I can't. You know, it's like who what's going to happen. I'm more about macro than I am about the internal stuff. We're just trying to prepare our cells for which way what's going to happen, and have scenarios for each one however it may play out. And I think it's an accommodation all those things. I don't think it's any one silver bullet. Yeah, control the things you can control and.

32:26 Worry about that if you provide a great I mean it's like I've always toe you when I used to run collections, and I tell we want them to think of us, to repay us. You're going to make it easy and not make them feel embarrassed because it's a normal event. Those things happen. They'll pay you before the one that does the harder technique, right, I mean, just we're all like they'll work with me. I'm willing to work with you if you get that across. So prepare yourselves those things you can control customer experience. Well, yes, definitely, Thank you, appreciate, appreciate both of you for joining us today on the podcast. Thank you Lenn, Thank you Malinda Ba