AutoPay Plus is a business that works with car payments/financing. The CEO is arguing that dealers shouldn’t treat lower interest rates as the main way to make cars more affordable.
An assembly plan means a plan to build a factory for putting cars together. Here, it’s about Toyota potentially building a new plant in Texas that would employ people and produce vehicles.
Toyota is looking at building a new factory in Texas. The point is that Toyota’s existing US factories are already running near maximum, so adding more cars isn’t straightforward.
Peak efficiency means the factories are already running as hard as they can. The show is saying Toyota doesn’t have much extra capacity to build more models.
The Ford Maverick is a small pickup truck. It’s built for people who want a truck bed for hauling, but don’t want a big, expensive truck. That’s why it comes up when talking about compact pickup options.
Subaru is changing course on EVs and will focus more on hybrid and gas-powered cars. The company had planned a new factory for EVs, but that factory would now make hybrids and other non-EV powertrains.
“Electric vehicle plans” means what a car company is planning to build for fully electric cars. In this story, Subaru is slowing that down and focusing on hybrids and gas cars instead.
“EV development” means working on making electric cars better and building new ones. If a company cuts back on it, it usually means they’re slowing down EV plans or updates.
“EV investments” are the resources a car company puts into making electric cars. A charge means the company is adjusting the financial value of those plans because results aren’t matching expectations.
A service department is the part of a dealership that fixes cars and does maintenance. If lots of people buy cars at once, the shop can get too busy to handle everything quickly.
An engine recall means the car company found a problem that could be unsafe or illegal. They require repairs, and that takes time and trained technicians.
Fuel economy is how efficiently a car uses energy to go a certain distance. This segment says cold and hot weather can make hybrids use more energy than usual.
AAA is a well-known U.S. organization for drivers that also does vehicle testing. Here, they’re providing study results about how cold and hot weather affect hybrid and EV efficiency.
For EVs, “range” means how many miles you can drive before the battery runs out. In cold weather, the battery doesn’t perform as well and the heater uses more power, so the range drops.
Engines create heat as a byproduct, and normally much of it is wasted. Hybrids can reuse some of that heat to help warm the cabin, which can be helpful in cold weather.
“Internal combustion” is the type of engine that burns fuel to make power. In a hybrid, that engine can also help with things like warming the car in cold weather.
Concept
cabin comfort quickly vs maximizing efficiency
This is the trade-off between getting the cabin comfortable right away and using energy efficiently. Heating or cooling the cabin quickly can cost energy, so you may not get as much driving range.
Thermal management systems are how an EV or hybrid keeps its battery and cabin from getting too hot or too cold. In winter, they’re especially important because heating can otherwise drain the battery and reduce range.
Concept
used EV market vs new EV sales
The used EV market can move differently from new EV sales because pricing, incentives, and buyer expectations change over time. When used EVs become cheaper, demand can rise even if new EV sales are slowing.
This is a cash-flow strategy: instead of paying once per month, the payment timing is matched to when the customer actually gets paid. The goal is to reduce the “lump sum” feeling of a large monthly bill and make the loan feel easier to manage.
Interest rates are what lenders charge to borrow money. If rates drop a little, your monthly payment might drop a little too—but if the car is expensive, that small change may not make it truly affordable.
Your monthly payment is the amount you pay each month to pay off the car loan. The point here is that affordability depends on whether that monthly amount fits your budget.
They’re talking about how longer car loans can make people keep cars longer. That changes how dealers make money, pushing more focus toward service and parts.
An 84-month car loan means you pay for the car over 7 years. It can make the monthly payment smaller, but you typically pay more overall because of interest.
The trade-in cycle is the pattern of how often consumers replace their vehicles and trade the old one in. If loans stretch longer, owners may delay trading, which can reduce dealer volume and shift revenue away from the traditional trade-in-driven business.
Negative equity means your car is worth less than what you still owe on it. If you trade it in, the difference usually has to be added to your next loan.
The F&I office is the part of the dealership that sets up your financing and sells extra coverage or insurance options. If the dealership sells fewer cars, that department usually makes less money.
Service visits are times you bring your car in for maintenance or repairs. Dealers want you to come back a certain number of times because that’s where a lot of their ongoing income comes from.
This means paying the loan down faster so you own more of the car sooner. That can help you get to a point where the car is worth more than what you still owe.
Sticker price is the advertised price of the car. The point is that dealers can’t always change that number, but incentives might lower the effective cost.
OEM means the company that originally makes the car. Sometimes that company offers incentives that can make the deal cheaper.
LIVE
Welcome to Daily Drive for Friday, May 15, 2026.
I'm Kellan Walker in Las Vegas.
Today on the show, Toyota considers a new $2 billion assembly plan in Texas, Subaru
shelves its EV plans to focus on hybrids, and Hyundai's rising sales create problems
for service departments.
Plus, AutoPay Plus CEO Robert Steenberg joins the show to talk about why dealers shouldn't
account on lower interest rates to fix affordability issues.
Let's run through all the news you need to know to keep up with the auto industry.
Toyota is considering a new $2 billion assembly plan in Texas that's according to documents
filed with the state.
The project is codenamed Project Orca.
Toyota says it would add 2,000 jobs near San Antonio.
If built, it would become Toyota's 6th US assembly plant when it opens in 2030.
Toyota's US plants are already running at peak efficiency.
There is basically no room left to add new products or boost output.
And dealers have been asking for new vehicles, like a compact pickup to compete with the Ford
Maverick.
There's just nowhere to build it.
We'll talk more about this story on our weekend drive edition of the show, available Saturday
morning.
Subaru is putting its electric vehicle plans on ice.
The Japanese automaker will focus on hybrids and gas engines instead.
Subaru had a brand new plant ready to go, set to open around 2028 to build its own in-house
EVs.
But now, the plant's opening with hybrids and combustion engines instead.
CEO Asushi Osaki says the company is significantly reducing resources for EV development.
And it's easy to see why.
US tariffs just wiped out $1.42 billion in earnings.
Plus the automaker took a $362 million charge on its EV investments.
And Hyundai's rising sales are actually creating a problem for service departments.
They just can't keep up with all the new work.
Vice President of Aftersales and Customer Experience Michael Poyer told Automotive News
the issue is a surge in sales.
Massive engine recalls costing more than $5 billion and not enough technicians.
The fix includes 150 mobile service vans hitting the road by year end, coaching 185 dealerships
on efficiency and recruiting more techs.
Poyer says Hyundai should climb back up satisfaction surveys by 2028.
And those are today's headlines.
You can find more details on all those stories at AutoNews.com.
It turns out hybrids lose fuel efficiency in extreme temperatures, just like EVs.
A new AAA study found hybrids drop 23% of their fuel economy when it's 20 degrees and
12% when it's 95 degrees.
EVs take an even bigger hit in the cold, losing 36% of their range.
Automotive News Deputy Editor Lindsey Van Hully wrote about it and joins me now.
Lindsey, welcome back to Daily Drive.
Hi, Kel.
So Lindsey, what surprised researchers most about how hybrids performed in cold weather
compared to EVs?
I think just the degree to which cold weather took a toll on their range and efficiency.
You know, it was the first time that AAA has tested hybrids.
2019, they did this study on EVs, trying to get a sense of what the impact of hot and cold,
extreme hot and cold, would have on EVs range.
And they wanted to test both whether EV technology has improved, but also if hybrids had similar
results when they were exposed to hot and cold temperatures.
And the fact that hybrids were as affected by cold more so than hot, I think, was something
that they hadn't necessarily expected.
They did do better than EVs slightly.
And part of that, they said, is because hybrids also have the internal combustion as part
of their design, and so therefore they can sort of capture heat that's generated as engine waste.
But just the degree to which the cold weather had an impact on hybrids, I think,
maybe was not what they were initially expecting before the testing was done.
So why do automakers prioritize getting the cabin comfortable quickly over maximizing efficiency?
And what does that mean for drivers?
You know, I think it's a balance, right?
That's how AAA described it.
That's how some of the automakers that I reached out to described it.
And, you know, if you think about it, if it's 20 degrees and you get in your car,
you want to be warm as quickly as possible.
You know, if it's 95 degrees and you get in that car that's been sitting in the driveway
or in the garage, you know what that feels like.
It's a really hot cabin.
And so, you know, you want to get that air conditioning going as quickly as possible.
You know, AAA, the researcher I talked to said, you know, it's a perfectly reasonable strategy,
but it does come at that trade-off of range.
And so, you know, it's a balance, I think, that automakers are trying to find,
is how do you get the cabin comfortable, get it to be the temperature that customers want it to be
as quickly as they want it to be while still, you know, not compromising on range and efficiency.
And so, a lot of that is part of the R&D work that's ongoing in hybrids and EVs,
is how you manage that, what the thermal management systems look like,
how the inputs are used, you know, how you're able to generate heat,
you know, in those kinds of cold conditions without draining the range and efficiency too much.
So, it's an ongoing thing. The automakers are certainly aware of it, and they, you know,
they tried to balance all of those things with the development of the vehicles.
Perfect. Lindsey, thank you so much for joining me.
Thanks, Gail.
Coming up, AutoPay Plus CEO Robert Steenberg talks about why lowering interest rates won't
fix the affordability crisis. That's next on Daily Drive.
New EV sales slipped in April, but the used EV market is telling a very different story.
On this week's episode of the Automotive News Shift podcast, I'm joined by Stephanie Valdez-Sridhi,
director of Industry Insights at Cox Automotive, and Elena Chickatelli, host and producer of the EVs
for Everyone podcast. We break down why new EV sales declined last month,
even as used EV sales surged nearly 17% from a year ago.
Looks like a new car, smells like a new car, but it's 40% cheaper.
Plus, my co-host, Hannah Lutz, joins me to talk about the biggest tech issues discussed
at this year's Automotive News Leading Women conference. I'm Molly Boygon.
Join me on Shift, available this Sunday wherever you get your podcasts.
Welcome back to Daily Drive. I'm Kellan Walker.
Vehicle affordability continues to be a major challenge for dealers and consumers alike.
Average new car payments have climbed to around $745 a month,
and many dealers believe lower interest rates would solve the problem.
But Robert Steenberg, CEO of AutoPay Plus, says that's not the answer.
He joins Automotive News' senior retail editor, Dan Shine, to discuss
why a quarter-point rate cut won't move the needle, and how dealerships can help customers
by aligning payments with their paycheck schedules.
Bob, thanks so much for joining me on the FNI Friday edition of Daily Drive.
No, thank you for having me. Glad to be here.
So I think when we see a lot of dealer surveys, what's ailing dealers, what are dealers concerned
about, a lot of the times they talk about interest rates. So if only interest rates were lower,
that could really solve our problem. Affordability is a big issue for dealers.
But you say maybe that's not the right way to look at that. Explain.
Well, the price of the new cars now averaged around $50,000,
and if someone lowers interest rates by a quarter-point, a half-point,
that's really not going to do much to a monthly payment. It's not going to do anything really
for the affordability. Average car payment, I think, is around $745. I don't think $735.
It's like the savings that's all of a sudden the cars are going to fly off a lot.
So like you said, it's more of an affordability issue for the consumer,
and they have to find a way to make that payment, which is larger than ever,
fit in with the way they run their lives, which is predominantly paycheck to paycheck.
Instead of one monthly payment, if you get paid weekly, then you should make your payment weekly,
or if it's bi-weekly, you can make it bi-weekly. That's the way you budget your lives, and that's
way it's going to smooth out the cash flow and make things at least seemingly more affordable
to the consumer. So how should the industry be looking at this, saying, okay, this is
interest rates are not really what's preventing consumers from transacting?
Well, the price of the cars the dealer is not really able to do much about.
So to get people down to the payment that the customer is comfortable with,
they keep extending out the terms farther and farther and farther. I think 20% of the
terms now are over 84 months, and I think the overall average is right around 72.
So looking at an 800-dollar-a-month car payment, it's pretty daunting for most consumers.
Right. So there are 84-month loans out there becoming more and more popular. People
strapping for a monthly payment, really, is what they're only focused on.
What does that do to that trade-in cycle?
Well, so far we haven't really seen it stretch out much farther than it has historically. I don't
believe that can last. I think negative equity now is averaging somewhere around 6,500, the last
thing I read from Cox. Inevitably, they're going to have to get past that three to three-and-a-half,
four-year cycle and stretch out a year or more further, and that's just going to take more
business away from the dealer where they historically count it on that routine trade cycle.
Is service and parts, is that one way to kind of bridge that gap or fill that revenue gap a
little bit? Well, they're going to have to focus on service because they're going to sell fewer
cars, and the fewer cars they sell amounts, that's less revenue coming into the F&I office,
they're going to have to make it up somewhere, and they're not really making it on the front
end of the car anymore. So the only place you have left to go is parts of service,
and that's why I see the manufacturers pushing so hard on the dealers to get them back for
a minimum of two or four service visits to get some of the dealer money back.
Yeah, and this is not an unusual situation for service and parts to be in because they've
had to carry the load in the past, or most recently during the pandemic. So again,
but it gets back to customer retention, customer service, and on the service side of things to get
customers to want to bring the vehicles into you as opposed to the shop down the street.
Well, they really need to get back to what they do a long time ago. You used to buy a car,
they walked you through the service department, introduced you to the service manager. Somewhere
along the line, that kind of got decoupled to where they don't seem to focus on that. I mean,
some do, and the good dealers do. The good ones do, yep. And they don't spend enough time
promoting the value of bringing your car back to the dealer service department,
and also that like it's not going to be 10 times more than going to Jiffy Loop.
You know, that's what everybody just naturally assumes, and the dealers to kind of let that
get out of hand and but think that's a standard thing. Right. It's about transparency and
even if you're a dealer, you know, kind of go shopping, the independent shops around you to
kind of see what they're charging for the breakers and the tire rotation and things like that. So
you have information to tell your customers, and we're only 10 bucks more than, you know,
the guy down the street.
Exactly. Don't let them leave thinking that you're three times more.
So I mentioned a little bit ago, you know, again, with 84 month loans and people again,
kind of seem like they're kind of searching they're they're shopping for a monthly payment
is kind of what they're, how do you kind of break that mindset or rethink that mindset?
Well, you know, I said, if someone's paid biweekly and you say to them, hey, you know,
can you afford $400 out of each paycheck to pay for this vehicle, as opposed to
can you afford $800 out of the last check, at least get some thinking in a way that their
their brain is used to working for the way they control their finances. And it makes it a much
easier pill for them to swallow. Now, but also paying it, you know, weekly or biweekly, you're
going to shorten the term of the loan, you know, accelerate the equity in the vehicle and that
will also help the dealers with that, you know, stretched out trade cycle.
And for dealers concerned about affordability, and again, like you said, you can't do much about
sticker prices, sticker prices, a sticker price, and you might hear OEM might give you some incentives.
Do you have advice or how they can kind of, is it just as simple as customer service and kind of
really trying to meet that customer where they are and find out a little bit more, it's going to
take a little bit more work to find out where they are, payment wise, and it's a little more work,
I think. Yeah, but you can't just, in the old days, you came in and you had a good credit score,
they just assumed you could buy anything. You know, that's really not the case now,
they're going to have to be a little more consultative and talk to the customer,
say, okay, here, this is about what we're looking at, is that going to fit comfortably, you know,
within, you know, your budget and your lifestyle, means price of gas is going up,
there's something else, some insurance is going up, there's another one.
So, you know, it's not just the vehicle itself, it's everything.
The monies means stretch thinner in a lot of different other places and things are going up,
so yeah. Bob, I really appreciate your time, great conversation about the affordability
issue and kind of facing dealers and consumers and appreciate your insights.
Anytime, Dan, thank you.
We'd love to hear from you.
Thank you.
you
About this episode
Toyota is weighing a $2 billion Texas assembly plant near San Antonio, codenamed Project Orca, with an opening targeted for 2030. Subaru, meanwhile, is putting its electric vehicle plans on ice and shifting to hybrids and gas engines. The show also digs into affordability: AutoPay Plus CEO Robert Steenberg argues dealers shouldn’t rely on lower interest rates alone, and suggests aligning payment frequency with paychecks. Later, AAA research explains why cold weather can hit EV range hard, while hybrids can fare better.
