Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are those other than quoted prices included within Level 1 that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Nonperformance risk is also required to be reflected in the fair value measurement, including an entity’s own credit standing when measuring the fair value of a liability.


	March 31, 2025
	Level 1		Level 2		Level 3		Total

	(U.S. dollars in millions)
Assets:
Derivative instruments:
Interest rate swaps	$	—	$	338	$	—	$	338
Cross currency swaps	—		51		—		51
Total assets	$	—	$	389	$	—	$	389
Liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	676	$	—	$	676
Cross currency swaps	—		444		—		444
Total liabilities	$	—	$	1,120	$	—	$	1,120


	March 31, 2024
	Level 1		Level 2		Level 3		Total

	(U.S. dollars in millions)
Assets:
Derivative instruments:
Interest rate swaps	$	—	$	714	$	—	$	714
Cross currency swaps	—		29		—		29
Total assets	$	—	$	743	$	—	$	743
Liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	881	$	—	881
Cross currency swaps	—		591		—		591
Total liabilities	$	—	$	1,472	$	—	$	1,472

The Company’s derivatives are transacted in over-the-counter markets and quoted market prices are not readily available. The Company uses third-party developed valuation models to value derivative instruments. These models estimate fair values using discounted cash flow modeling techniques, which utilize the contractual terms of the derivative instruments and market-based inputs, including interest rates and foreign exchange rates. Discount rates incorporate counterparty and HMC specific credit default spreads to reflect nonperformance risk.

The Company’s derivative instruments are classified as Level 2 since all significant inputs are observable and do not require management judgment. There were no transfers between fair value hierarchy levels during the fiscal years ended March 31, 2025 and 2024. Refer to Notes 1(k) and 5 for additional information on derivative instruments.


	Level 1		Level 2		Level 3		Total		Lower-of-cost or fair value adjustment

	(U.S. dollars in millions)
March 31, 2025
Vehicles held for disposition	$	—	$	—	$	121	$	121	$	46
March 31, 2024
Vehicles held for disposition	$	—	$	—	$	100	$	100	$	28

Vehicles held for disposition consist of returned and repossessed vehicles. They are valued at the lower of their carrying value or estimated fair value, less estimated disposition costs. The fair value is based on current average selling prices of like vehicles at wholesale used vehicle auctions.

The following tables summarize the carrying values and fair values of the Company’s financial instruments except for those measured at fair value on a recurring basis. Certain financial instruments and all nonfinancial assets and liabilities are excluded from fair value disclosure requirements including the Company’s investment in operating leases. The carrying values of cash and cash equivalents, restricted cash, and short-term investments approximate fair values due to the short-term nature and limited credit risk of the instruments.


	March 31, 2025
			Fair value
	Carrying value		Level 1		Level 2		Level 3		Total

	(U.S. dollars in millions)
Assets:
Dealer loans, net	$	4,335	$	—	$	—	$	3,940	$	3,940
Retail loans, net	48,181		—		—		48,102		48,102

Liabilities:
Commercial paper	$	6,022	$	—	$	6,023	$	—	$	6,023
Related party debt	1,800		—		1,800		—		1,800
Bank loans	2,100		—		2,099		—		2,099
Medium term note program	37,153		—		36,795		—		36,795
Other debt	3,088		—		3,130		—		3,130
Secured debt	12,384		—		12,472		—		12,472


	March 31, 2024
			Fair value
	Carrying value		Level 1		Level 2		Level 3		Total

	(U.S. dollars in millions)
Assets:
Dealer loans, net	$	4,052	$	—	$	—	$	3,700	$	3,700
Retail loans, net	43,196		—		—		42,280		42,280

Liabilities:
Commercial paper	$	5,293	$	—	$	5,293	$	—	$	5,293
Bank loans	1,804		—		1,811		—		1,811
Medium term note program	31,151		—		30,387		—		30,387
Other debt	3,318		—		3,251		—		3,251
Secured debt	9,351		—		9,333		—		9,333

Fair value information presented in the tables above is based on information available at March 31, 2025 and 2024. Although the Company is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been updated since those dates, and therefore, the current estimates of fair value at dates subsequent to those dates may differ significantly from the amounts presented herein.