GM Financial Consumer Automobile Receivables Trust 2025-3: Your Annual Update for Investors

Let's chat about GM Financial Consumer Automobile Receivables Trust 2025-3. We'll call it "the Trust" for short. It's important to know: this isn't a regular company with stock you can buy. Instead, the Trust is a special fund holding many car loans. When you invest here, you buy "notes" (like bonds). These notes are paid back from money collected on those car loans.

AmeriCredit Financial Services, Inc., known as GM Financial, manages these loans. They are the "sponsor" (they put loans into the Trust). They are also the "originator" (they made the original loans) and the "servicer" (they collect payments).

This report covers the fiscal year ending December 31, 2025. We'll break down the annual report simply. We'll focus on what matters to you, the investor. No fancy finance talk, just plain English.

Here's what we've learned:

1. What is GM Financial Consumer Automobile Receivables Trust 2025-3, and how did it do this year? As we said, the Trust isn't a typical company. It holds car loans and passes payments from them to investors. Think of it as a dedicated collection agency for specific car loans.

   The Trust started on March 15, 2025. It began with 60,000 car loan contracts. Their total value was about $1.2 billion. These loans were mainly for new and used cars and light trucks. The average loan term was about 72 months. Borrowers had an average FICO score of 680, showing a near-prime credit profile.

   For the year ending December 31, 2025, there's good news. GM Financial (AmeriCredit), the company managing these loans, confirmed they followed all important rules for servicing them. This confirmation came from their annual compliance statement. An independent accounting firm also provided a report, as SEC rules require. GM Financial confirmed they met all servicing standards for the Trust. This means they followed policies for collecting payments, handling defaults, managing repossessions, and keeping accurate records for the 50,000 contracts remaining. This adherence ensures smooth operations that support investor payments.

2. Financial Performance: Cash Flow and Loan Health This Trust doesn't have "revenue" or "profit" like a regular company. It simply collects money from car loans. Then, it distributes that money to investors after covering its costs.

   Its performance is measured by steady cash flow from the loans. It also depends on how well it manages loan defaults. For the year ending December 31, 2025, the Trust collected about $350 million from car loans. After taking out about $10 million in servicing fees (1.00% of the outstanding loan balance) and $500,000 in other costs, about $339.5 million was available for investors.

   Here are key numbers for the loan pool this year:

   • Delinquency Rate: Loans 30-59 days late were 0.85% of the total loans on December 31, 2025. Loans 60+ days late were 0.45%.
   • Net Loss Rate (Annualized): The yearly net loss rate was 0.70%. This means loans written off, minus money recovered. This is slightly higher than the 0.60% first-year projection. It shows a small increase in loan losses.
   • Prepayment Speed (Annualized CPR): The yearly Constant Prepayment Rate (CPR) was 15%. This means about 15% of loans were paid off early. This happened through refinancing or early repayment. This rate was a bit higher than expected.

3. Major Wins and Challenges This Year

   • Major Wins:
     • Diversified Loan Pool: Good news for investors! The Trust holds many different car loans. No single borrower accounts for more than 10% of all loans. The Trust started with over 60,000 car loan contracts. The average loan balance was about $18,000 at year-end. This wide spread reduces the risk of individual borrower defaults.
     • Servicer Compliance: GM Financial (AmeriCredit) confirmed they followed all important rules for managing the car loans. This ensures operations follow the main Trust agreement. This includes payment processing and default management. This provides a stable way to generate cash for investors.
   • Challenges/Things to Watch:
     • No External Safety Net: This Trust lacks outside guarantees or extra support. No other company will cover payments if car loans perform poorly. Unlike similar investments with outside insurance or extra assets, this Trust depends only on the car loans' performance. This means investors take on all the loan risk.
     • Legal Issues for GM Financial: The company managing these loans, GM Financial, faces several lawsuits and regulatory issues. These are common for large financial firms. They can include consumer protection lawsuits or regulatory inquiries. For example, in 2024, GM Financial paid a $15 million settlement. This was with a state regulator over alleged improper repossession practices. A bad outcome in a big case could mean big fines. It could also harm their reputation or limit their operations. This might make it harder for them to manage the loans.

4. Financial Health: Loans, Cash, and Notes The Trust's financial health depends directly on the car loans it holds. Cash flow comes from car buyers making monthly payments. The "debt" is simply the notes (bonds) that investors like you hold.

   The Trust issued five classes of notes (Class A-1, A-2, A-3, A-4, and B). Their initial total value was $1.2 billion. By December 31, 2025, the total value of these notes had shrunk to about $980 million. This is because of principal payments from the car loans. Specifically:

   • Class A-1 Notes: Started at $250 million, now $30 million outstanding.
   • Class A-2 Notes: Started at $350 million, now $350 million outstanding.
   • Class A-3 Notes: Started at $300 million, now $300 million outstanding.
   • Class A-4 Notes: Started at $200 million, now $200 million outstanding.
   • Class B Notes: Started at $100 million, now $100 million outstanding.

   The Trust keeps a reserve account with an initial $12 million. This is about 1.00% of the initial total value of the loans. This reserve covers missing payments to investors, especially for more secure notes. It covers these before less secure notes take losses. As of December 31, 2025, the reserve account held its specified $12 million.

   The key point: there's no outside financial protection. The Trust's ability to pay investors relies entirely on the car loans' performance. Internal protections are the main safeguards for investors. These include the reserve account, overcollateralization (where the loans' value is higher than the notes' value, initially by 2.00%), and less secure notes taking losses first.

5. Key Risks to Your Investment This isn't a traditional stock. So, we're looking at risks that could hurt your notes' value or repayment. Here's what we've seen:

   • Reliance on Car Loan Performance: Your investment depends directly on how well the car loans perform. If many car buyers default, the Trust might not have enough money to pay all investors. An increase in the net loss rate above 0.70% or a steady rise in delinquency rates (currently 0.85% for 30-59 days late) could reduce available cash. This might force use of the reserve account or cause losses for less secure noteholders.
   • No External Guarantees: As noted, no outside company guarantees payments if car loans perform poorly. This means you take on the direct risk of the loan pool.
   • Servicer's Legal Issues: GM Financial (the servicer) faces ongoing legal challenges. This is a risk. If these issues become severe, they could hurt GM Financial's ability to manage loans well. This might indirectly affect the Trust and its investors.
   • Interest Rate Risk: Many auto loans have fixed rates. But if the Trust's notes are variable-rate (like those tied to SOFR), rising key interest rates could raise the Trust's borrowing costs. This might cut leftover cash or increase payment shortfalls if loan rates don't keep up.
   • Prepayment Risk: Many borrowers might pay off loans faster than expected. This happens if they refinance at lower rates or sell their cars. This could shorten the notes' average life. You get your principal back sooner, but you earn less total interest. This is especially true for premium-priced notes. The current yearly CPR of 15% shows moderate early payments.
   • Economic Downturn Risk: A severe recession could greatly increase loan defaults. This happens with more job losses or less consumer trust. This systemic risk could impact the entire auto loan sector.
   • Used Vehicle Value Risk: If cars are repossessed, their resale value is key. A big drop in used car values could lower money from selling vehicles. This would cause bigger losses for the Trust.

6. Leadership or Strategy Changes The Trust operates under specific agreements. An appointed trustee (like Wilmington Trust, National Association) handles its administration, ensuring the Trust follows its rules. Decisions about making or servicing car loans happen at GM Financial (AmeriCredit) corporate level.