v3.25.4
Finance Receivables
 9 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Finance Receivables Finance Receivables
Finance receivables consisted of the following:
 December 31, 2025
 RetailDealerTotal
 (U.S. dollars in millions)
Finance receivables$50,264 $4,503 $54,767 
Allowance for credit losses(454)(9)(463)
Deferred dealer participation and other deferred costs680 — 680 
Unearned subsidy income(770)— (770)
Finance receivables, net$49,720 $4,494 $54,214 
 March 31, 2025
 RetailDealerTotal
 (U.S. dollars in millions)
Finance receivables$48,698 $4,344 $53,042 
Allowance for credit losses(387)(9)(396)
Deferred dealer participation and other deferred costs616 — 616 
Unearned subsidy income(746)— (746)
Finance receivables, net$48,181 $4,335 $52,516 
 
Finance receivables include retail loans with a net carrying amount of $15.0 billion and $13.0 billion as of December 31, 2025 and March 31, 2025, respectively, which have been transferred to bankruptcy-remote special purpose entities (SPEs) and are considered to be legally isolated but do not qualify for sale accounting treatment. These retail loans are restricted and serve as collateral for the payment of the related secured debt obligations. Refer to Note 9 for additional information.
Allowance for Credit Losses
The following is a summary of the activity in the allowance for credit losses of finance receivables:
 Three and nine months ended December 31, 2025
 RetailDealerTotal
 (U.S. dollars in millions)
Beginning balance as of October 1, 2025$421 $9 $430 
Provision126 — 126 
Charge-offs(131)— (131)
Recoveries37 — 37 
Effect of translation adjustment1 — 1 
Ending balance as of December 31, 2025$454 $9 $463 
Beginning balance as of April 1, 2025$387 $9 $396 
Provision315 — 315 
Charge-offs(362)— (362)
Recoveries113 — 113 
Effect of translation adjustment1 — 1 
Ending balance as of December 31, 2025$454 $9 $463 
Three and nine months ended December 31, 2024
RetailDealerTotal
(U.S. dollars in millions)
Beginning balance as of October 1, 2024$404 $8 $412 
Provision69 1 70 
Charge-offs(111)— (111)
Recoveries32 — 32 
Effect of translation adjustment(1)— (1)
Ending balance as of December 31, 2024$393 $9 $402 
Beginning balance as of April 1, 2024$345 $8 $353 
Provision227 1 228 
Charge-offs(287)— (287)
Recoveries109 — 109 
Effect of translation adjustment(1)— (1)
Ending balance as of December 31, 2024$393 $9 $402 
 
The allowance increased during the nine months ended December 31, 2025 primarily due to the expected credit losses recognized on the high volume of retail loan acquisitions during the period and the increase to the estimate of expected credit losses attributable to the increasing trend of delinquencies and net charge-offs.
Delinquencies
Collection experience provides an indication of the credit quality of finance receivables. For retail loans, delinquencies are a good predictor of charge-offs in the near term. The likelihood of accounts charging off is significantly higher once an account becomes 60 days delinquent. Retail loans are considered delinquent if more than 10% of a scheduled payment is contractually past due on a cumulative basis. Dealer loans are considered delinquent when any payment is contractually past due. The following is an aging analysis of past due finance receivables:
30 – 59 days
past due		60 – 89 days
past due		90 days
or greater
past due		Total
past due		Current or
less than 30
days past due		Total
finance
receivables
 (U.S. dollars in millions)
December 31, 2025      
Retail loans:      
New automobile$450 $120 $29 $599 $39,429 $40,028 
Used and certified automobile194 53 13 260 8,263 8,523 
Motorcycle and other26 12 7 45 1,578 1,623 
Total retail loans670 185 49 904 49,270 50,174 
Dealer loans:
Wholesale flooring1 — — 1 2,948 2,949 
Commercial loans— — — — 1,554 1,554 
Total dealer loans1 — — 1 4,502 4,503 
Total finance receivables$671 $185 $49 $905 $53,772 $54,677 
March 31, 2025      
Retail loans:      
New automobile$331 $73 $20 $424 $38,105 $38,529 
Used and certified automobile155 38 10 203 8,291 8,494 
Motorcycle and other18 7 4 29 1,516 1,545 
Total retail loans504 118 34 656 47,912 48,568 
Dealer loans:
Wholesale flooring— — 1 1 3,005 3,006 
Commercial loans— — — — 1,338 1,338 
Total dealer loans— — 1 1 4,343 4,344 
Total finance receivables$504 $118 $35 $657 $52,255 $52,912 
 
Credit Quality Indicators
Credit losses are an expected cost of extending credit. The majority of our credit risk is with consumer financing and to a lesser extent with dealer financing. Exposure to credit risk in retail loans is managed through regular monitoring and periodic adjusting of underwriting standards, pricing of contracts for expected losses, and focusing collection efforts to minimize losses. Exposure to credit risk for dealers is managed through ongoing review of their financial condition and payment performance.
Retail Loan Segment
The Company utilizes proprietary credit scoring systems to evaluate the credit risk of applicants and assign internal credit grades at origination. Factors used to develop a customer’s credit grade include the terms of the contract, the loan-to-value ratio, the customer’s debt ratios, and credit bureau attributes such as the number of trade lines, utilization ratio, and number of credit inquiries. Different scorecards are utilized depending on the type of product financed. The Company regularly reviews and analyzes the performance of the consumer-financing portfolio to ensure the effectiveness of its underwriting guidelines, purchasing criteria and scorecard predictability of customers. Internal credit grades are determined only at the time of origination and are not reassessed during the life of the contract. The following describes the internal credit grade ratings.
A - Borrowers classified as very low credit risks. Based on their application and credit bureau report, they have the ability to pay and have shown a willingness to pay. Generally, A credit borrowers have an extensive credit history, an excellent payment record and extensive financial resources.

B - Borrowers classified as relatively low credit risks. Based on their application and credit bureau report, they have the ability to pay and have shown a willingness to pay. Generally, B credit borrowers may have one or more conditions that could reduce the internal credit score, such as a shorter credit history or a minor credit weakness.

C - Borrowers classified as moderate credit risks. Based on their application and credit bureau report, they may have limited financial resources, limited credit history, or a weakness in credit history.

D - Borrowers classified as relatively higher credit risks. Based on their application and credit bureau report, they may have very limited financial resources, very limited or no credit history, or a poor credit history.

Others - Borrowers, including businesses, without credit bureau reports.

The following table summarizes the amortized cost of retail loans by internal credit grade:
Retail loans by vintage fiscal year
20262025202420232022PriorTotal
(U.S. dollars in millions)
December 31, 2025
Credit grade A$10,609 $10,641 $6,510 $2,325 $898 $395 $31,378 
Credit grade B2,899 2,972 2,123 934 371 173 9,472 
Credit grade C2,126 2,175 1,425 590 259 127 6,702 
Credit grade D628 655 354 127 61 43 1,868 
Others233 259 156 60 31 15 754 
Total retail loans$16,495 $16,702 $10,568 $4,036 $1,620 $753 $50,174 
Gross charge-offs for the nine months ended December 31, 2025$27 $157 $110 $43 $15 $10 $362 


Retail loans by vintage fiscal year
20252024202320222021PriorTotal
(U.S. dollars in millions)
March 31, 2025
Credit grade A$14,245 $9,403 $3,620 $1,838 $1,140 $136 $30,382 
Credit grade B3,800 2,919 1,365 639 371 73 9,167 
Credit grade C2,830 2,006 869 439 259 66 6,469 
Credit grade D879 516 190 103 73 38 1,799 
Others351 221 89 54 25 11 751 
Total retail loans$22,105 $15,065 $6,133 $3,073 $1,868 $324 $48,568 
Gross charge-offs for the fiscal year ended March 31, 2025$62 $188 $88 $38 $18 $12 $406 
Dealer Loan Segment
The Company utilizes an internal risk rating system to evaluate dealer credit risk. Dealerships are assigned an internal risk rating based on an assessment of their financial condition and other factors. Factors including liquidity, financial strength, management effectiveness, and operating efficiency are evaluated when assessing their financial condition. Financing limits and interest rates are based upon these risk ratings. Monitoring activities including financial reviews and inventory inspections are performed more frequently for dealerships with weaker risk ratings. The financial conditions of dealerships are reviewed at least annually and their risk ratings are updated accordingly.
Dealerships have been divided into the following groups:
Group I - Dealerships in the strongest internal risk rating tier
Group II - Dealerships with internal risk ratings below the strongest tier
Group III - Dealerships with impaired loans

The following table summarizes the amortized cost of dealer loans by risk rating groups:
Commercial loans by vintage fiscal year
20262025202420232022PriorRevolving loansWholesale FlooringTotal
(U.S. dollars in millions)
December 31, 2025
Group I$38 $134 $105 $50 $8 $129 $976 $1,748 $3,188 
Group II8 17 56 2 5 26 — 1,200 1,314 
Group III— — — — — — — 1 1 
Total dealer loans$46 $151 $161 $52 $13 $155 $976 $2,949 $4,503 
Gross charge-offs for the nine months ended December 31, 2025$— $— $— $— $— $— $— $— $— 

Commercial loans by vintage fiscal year
20252024202320222021PriorRevolving loansWholesale FlooringTotal
(U.S. dollars in millions)
March 31, 2025
Group I$149 $110 $52 $13 $86 $53 $762 $1,764 $2,989 
Group II23 56 3 — 6 25 — 1,241 1,354 
Group III— — — — — — — 1 1 
Total dealer loans$172 $166 $55 $13 $92 $78 $762 $3,006 $4,344 
Gross charge-offs for the fiscal year ended March 31, 2025$— $— $— $— $— $— $— $— $— 

Loan Modifications
The contractual terms of loans may be modified when borrowers are experiencing financial difficulties in an effort to mitigate losses. There were no dealer loans that were modified for dealers experiencing financial difficulties during the nine months ended December 31, 2025. Payment deferrals are granted on retail loans, however the delays in payments are considered insignificant since the number of deferred payments are limited and interest continues to accrue during the deferral period. In certain situations, the Company may grant term extensions on retail loans in the United States. Term extensions extend the maturity date of the loan, which reduces the monthly payments over the remaining extended term of the loan. Term extensions do not change the contractual interest rates or reduce the outstanding principal balances. During the nine months ended December 31, 2025, term extensions were not material to the Company’s consolidated financial statements. Retail loans may also be modified in reorganization proceedings pursuant to the U.S. Bankruptcy Code, which may include interest rate adjustments, term extensions, and principal forgiveness. Retail loans modified under bankruptcy protection were not material to the Company’s consolidated financial statements during the nine months ended December 31, 2025.