Online sales will rise, loan terms shorten in 2020, EFG says

Consumers will increasingly favor online powersports sales and shorter loan terms in 2020 and beyond, predicts EFG Companies.

While consumers have been driving a need for online sales for the past few years, the technology wasn’t yet there, John Pappanastos, president and chief executive of EFG Companies, said in a press release. However, the technology is catching up, so dealers have more opportunity to workshop an online sales model.

“I believe over the next few years, we will see dealers more heavily invest in an online sales model,” Pappanastos explained. “Aside from the logistics of completing a purchase online with the right technology solutions, the role of the business development company will change, hiring and training will change, and data security and fraud prevention will be top of mind.”

Additionally, the powersports industry is mirroring the auto industry with regard to loan terms. Despite auto loan terms as long as 72 months, monthly payments average more than $400, according to Brien Joyce, vice president of specialty services at EFG. Loan terms were lengthened to make expensive new cars more accessible to consumers, but that “clearly isn’t working” because of the rise in used-car purchases, he said.

“Going forward, we can expect dealers to find creative ways to shorten terms and trade cycles,” Joyce added. “We’ll see more lease options with more granular terms to match consumer buying and driving habits.”

Over the next five years, the most significant change with dealerships will involve a more customized sales process. “Dealers will have to adjust their sales model to enable customers to purchase their vehicle based on their own personal preferences, whether that’s online, over the phone, or in the showroom,” EFG Executive Vice President John Stephens stated. “To incentivize more foot traffic, dealerships will become more attractive places to visit. You’ll see greater concierge services, like vehicle delivery and pickup, and the dealership will become a place that allows the dealer to build a community.”