Forecasts from LMC Automotive, Edmunds.com, and Kelley Blue Book call for light vehicle sales to rise about 1% from August 2016. August could be the first positive month of 2017 for U.S. auto sales, breaking a streak of seven consecutive year-over-year declines. This positive outlook, coupled with the historically high-volume Labor Day weekend, could have lenders breathing a small sigh of relief.
But while this is certainly positive news, the path ahead for the remainder of 2017 is still challenging for the retail market. And now is not the time for lenders to ease up on their efforts in the final four months of the year.
Let’s review the practices lenders should have adopted in January — to ensure a profitable 2017:
~ Optimize for competition
This flat-to-down market means fewer buyers in the market and more competition for those loan dollars. Make sure those marketing dollars are working hard for your business. Do you have solid data on mindshare, marketshare and conversion rates? Are you reaching those buyers in an effective, cost-efficient manner?
~ Strengthen relationships
While marketing to consumers is important, strengthening your relationships with your dealers is also key. A healthy, symbiotic relationship is vital to both parties, and will ensure your loan portfolio is maximizing its potential. Maintain those weekly in-dealership meetings and review profit metrics quarterly. And while technology solutions are certainly the wave of the future, having a loan officer available during dealership hours can boost that relationship — and give you a jump on the competition.
~ Maximize profit potential
While we have seen delinquencies rise over the past few months, we can also expect some credit indices to ease with the continued strength in employment numbers. The recession taught us that consumer protection products protect loan portfolios. In fact, some retailers are seeing a continued rise in profit from the F&I office. Make sure your team is well aware of the products available — and how they can positively impact the bottom line.
~ Stay compliant
Federal, state, and local compliance regulations are not going away. But their impact on your organization is well within your purview. A well-trained staff, coupled with well-trained counterparts in the dealership, will spend less time meeting compliance requirements. Touch up training resources, review workflow processes, and make sure your dealers are doing the same.
The book has not been fully written on 2017, and there is a lot of money still to be made. The recent flooding in Southeast Texas due to Hurricane Harvey, and a potential direct hit from Hurricane Irma, could mean increased demand beyond those numbers previously forecast. Continued strong employment numbers and rumors of a revised tax code could bode well for heightened consumer confidence. Now is not the time let your good efforts lapse.
With more than 40 years in administering consumer protection products and working hand-in-hand with dealers across the U.S., EFG Companies knows how to structure your loans to be more attractive in the F&I office with F&I products custom-tailored to match your dealership-partner’s demographics. Contact us today to find out how.Like This Post