The American Financial Services Association (AFSA) has announced that while consumer and business resilience supported the economy and auto sector in 2025, inflation and interest rates will be key factors shaping 2026. This information was shared in a recent blog post by the association.
According to AFSA, during Used Car Week 2025, its economist joined experts from Black Book, CarGurus, and TransUnion on the "Inside Automotive & the Economy" panel. The discussion focused on economic and auto-industry trends, highlighting how consumer and business resilience helped the U.S. economy and auto sector navigate supply, interest-rate, and cost-of-living pressures throughout 2025.
AFSA emphasized that interest rates are central to the 2026 outlook. Higher borrowing costs are expected to shape credit conditions for consumers and auto finance. The Federal Reserve’s federal funds target range stood at 3.75%–4.00% as of October 30, 2025. Industry forecasters such as Cox Automotive anticipate that vehicle markets in 2025 will remain sensitive to financing costs and affordability constraints for buyers.
Inflation is also flagged by AFSA as a key risk to the 2026 outlook. Households have limited capacity to handle further large cost-of-living increases and unexpected expenses. Recent U.S. data indicate inflation running at about 3% year-on-year in September 2025, up from 2.9% in August, which remains above the Federal Reserve’s goal of 2%. This continues to exert pressure on consumer budgets, savings cushions, and credit performance according to Trading Economics.
Founded in 1916, AFSA serves as the primary national trade association for the U.S. consumer credit industry. Its mission is to promote safe, ethical lending practices to informed borrowers while protecting consumers’ access to credit and choice. The association represents lenders involved in vehicle finance, traditional installment lending, credit cards, mortgages, and related services from its headquarters in Washington D.C.