v3.26.1
Finance Receivables
 3 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
Finance Receivables Finance Receivables
Finance receivables consisted of the following:
June 30, 2026
RetailDealerTotal
(U.S. dollars in millions)
Finance receivables$50,750 $4,696 $55,446 
Allowance for credit losses(441)(9)(450)
Deferred dealer participation and other deferred costs704 — 704 
Unearned subsidy income(812)— (812)
Finance receivables, net$50,201 $4,687 $54,888 
March 31, 2026
RetailDealerTotal
(U.S. dollars in millions)
Finance receivables$50,173 $4,703 $54,876 
Allowance for credit losses(427)(9)(436)
Deferred dealer participation and other deferred costs688 — 688 
Unearned subsidy income(785)— (785)
Finance receivables, net$49,649 $4,694 $54,343 
 
Finance receivables include retail loans with a net carrying amount of $15.8 billion and $16.1 billion as of June 30, 2026 and March 31, 2026, 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 months ended June 30, 2026
RetailDealerTotal
(U.S. dollars in millions)
Beginning balance as of April 1, 2026$427 $9 $436 
Provision86 — 86 
Charge-offs(113)— (113)
Recoveries41 — 41 
Effect of translation adjustment— — — 
Ending balance as of June 30, 2026$441 $9 $450 
Three months ended June 30, 2025
RetailDealerTotal
(U.S. dollars in millions)
Beginning balance as of April 1, 2025$387 $9 $396 
Provision103 — 103 
Charge-offs(102)— (102)
Recoveries37 — 37 
Effect of translation adjustment1 — 1 
Ending balance as of June 30, 2025$426 $9 $435 
 
The allowance increased during the three months ended June 30, 2026 primarily due to 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)
June 30, 2026
Retail loans:
New automobile$415 $112 $26 $553 $39,848 $40,401 
Used and certified automobile169 44 9 222 8,425 8,647 
Motorcycle and other23 10 5 38 1,556 1,594 
Total retail loans607 166 40 813 49,829 50,642 
Dealer loans:
Wholesale flooring— — — — 3,062 3,062 
Commercial loans— — — — 1,634 1,634 
Total dealer loans— — — — 4,696 4,696 
Total finance receivables$607 $166 $40 $813 $54,525 $55,338 
March 31, 2026
Retail loans:
New automobile$402 $89 $22 $513 $39,405 $39,918 
Used and certified automobile165 35 8 208 8,360 8,568 
Motorcycle and other23 9 5 37 1,553 1,590 
Total retail loans590 133 35 758 49,318 50,076 
Dealer loans:
Wholesale flooring— — — — 3,136 3,136 
Commercial loans— — — — 1,567 1,567 
Total dealer loans— — — — 4,703 4,703 
Total finance receivables$590 $133 $35 $758 $54,021 $54,779 
 
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
20272026202520242023PriorTotal
(U.S. dollars in millions)
June 30, 2026
Credit grade A$4,372 $12,010 $8,420 $4,810 $1,609 $613 $31,834 
Credit grade B1,080 3,368 2,418 1,636 686 290 9,478 
Credit grade C796 2,454 1,742 1,099 438 212 6,741 
Credit grade D249 702 513 266 92 56 1,878 
Others76 245 201 118 43 28 711 
Total retail loans$6,573 $18,779 $13,294 $7,929 $2,868 $1,199 $50,642 
Gross charge-offs for the three months ended June 30, 2026$— $41 $39 $21 $8 $4 $113 


Retail loans by vintage fiscal year
20262025202420232022PriorTotal
(U.S. dollars in millions)
March 31, 2026
Credit grade A$13,406 $9,504 $5,625 $1,948 $659 $243 $31,385 
Credit grade B3,659 2,696 1,879 808 295 113 9,450 
Credit grade C2,664 1,954 1,255 510 208 82 6,673 
Credit grade D767 584 307 109 49 28 1,844 
Others272 229 136 51 25 11 724 
Total retail loans$20,768 $14,967 $9,202 $3,426 $1,236 $477 $50,076 
Gross charge-offs for the fiscal year ended March 31, 2026$63 $204 $141 $55 $19 $11 $493 
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
20272026202520242023PriorRevolving loansWholesale FlooringTotal
(U.S. dollars in millions)
June 30, 2026
Group I$39 $45 $130 $103 $49 $123 $1,045 $1,751 $3,285 
Group II1 1 13 28 2 30 25 1,311 1,411 
Group III— — — — — — — — — 
Total dealer loans$40 $46 $143 $131 $51 $153 $1,070 $3,062 $4,696 
Gross charge-offs for the three months ended June 30, 2026$— $— $— $— $— $— $— $— $— 

Commercial loans by vintage fiscal year
20262025202420232022PriorRevolving loansWholesale FlooringTotal
(U.S. dollars in millions)
March 31, 2026
Group I$50 $135 $104 $50 $8 $125 $965 $1,853 $3,290 
Group II2 13 56 2 5 26 26 1,283 1,413 
Group III— — — — — — — — — 
Total dealer loans$52 $148 $160 $52 $13 $151 $991 $3,136 $4,703 
Gross charge-offs for the fiscal year ended March 31, 2026$— $— $— $— $— $— $— $— $— 

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 three months ended June 30, 2026. 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 three months ended June 30, 2026, 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 three months ended June 30, 2026.