Perhaps slowing sales is the only impediment for the ongoing digital evolution of automotive retailing and financing.

The Q4 Auto Finance Digital Transformation Index from Wolters Kluwer Compliance Solutions showed digital adoption sustained an end-of-quarter dip in line with car sales, but the long-term trajectory of digital transformation remains robust.

Despite this 4.64% quarterly dip in eContracting volume, Wolters Kluwer’s digital growth significantly outpaced the broader market’s annual performance for 2025.

Matt Babcock, who oversees digital lending product strategy for Wolters Kluwer, explained the fourth-quarter data reflects a market navigating the expiration of electric vehicle tax incentives and a softening in the subprime sector, yet finding additional momentum in digital securitization markets.

“This year continued to define the current opportunities presented for digital transformation in auto finance,” Babcock said in a news release. “While Q4 presented headwinds —particularly in the EV and subprime sectors — our data shows that lenders who have committed to digital workflows are continuing to outpace the general market.

“Even when sales volume fluctuates in the broader markets, the shift toward evidentiary integrity and standardized digital documentation is providing the foundation lenders need to withstand regulatory uncertainty, industry volatility, and institutional scrutiny,” Babcock continued.

Wolters Kluwer highlighted digital contracting volume tracked closely with overall automotive sales trends, which saw a year-end slowdown. However, the digital adoption rate overall in 2025 illustrates a continued growth trajectory. Here are the index specifics:

—Quarter-over-quarter trend: eContracting volume decreased 4.64% from Q3 to Q4 (While the broader market saw a 5.4% sales decrease in Q4 activity).

—Year-over-year growth: A 3.23% increase was observed for eContracting from Q4 2024 to Q4 2025 (whereas the broader market fell 2.7% in sales comparing Q4 2025 to Q4 2024).

—Long-term adoption: The four-year trend continues to show substantial digital adoption growth of 73% since Q4 2021.

—Subprime softening: The index also noted a decrease in digital volume from several subprime and deep subprime lenders of used vehicles as they adjusted their Q4 risk profiles.

Turning to another part of its quarterly update, Wolters Kluwer said digital securitization activity surged in the fourth quarter, signaling a return of investor confidence and a push to finalize deals before year-end.

Here are the specifics from the securitization space:

—Quarter-over-quarter Surge: Digital securitization transactions increased 24.97% from Q3 to Q4 2025, dramatically outpacing the broader market, which saw an 8.5% decrease.

—Growth Drivers: This rebound was driven by repeat issuances and several smaller issuers completing their first digital deals of the year in Q4.

—Market scrutiny as a catalyst: The quarter was also defined by intense market scrutiny focused on high-profile asset performance. This heightened spotlight served as a powerful catalyst for the industry, driving issuers to accelerate the adoption of digital tools. By leveraging digitalization, market participants sought to provide the increased transparency and data integrity required to maintain investor trust during periods of rigorous evaluation.

—Four-year trend: Long-term digital adoption for securitizations remains up 14.8% since Q4 2021.

Babcock elaborated about the fourth-quarter trends and what could happen digitally this year in the episode of the Auto Remarketing Podcast below.