Brien JoyceVice PresidentEFG Companies
What are auto lenders doing to prepare for 2020?
Going into another highly political year, we can expect some consumer unrest and as consumer confidence spikes up and down. However, if interest rates stay low and corporate earnings strong, the auto lending space could weather 2020 without too many disruptions. To fortify auto loans for consumer uncertainty, lenders are evaluating their consumer protection product mix and are placing more emphasis on those products that help consumers most, like when large, unexpected repairs hit their budget, or when unexpected job loss occurs directly affecting their ability to make their auto loan payments. These products can be very beneficial to the consumer while also increasing revenue for the financial institution. By highlighting products like vehicle service contract and vehicle return protection, strategic lenders have a better ability to increase consumer confidence in a time when confidence is in short supply.
How are lenders appealing to Millennial car buyers?
Now that Millennials are the largest consumer demographic, lenders are paying attention to their buying habits to make adjustments. The fact is, lenders can no longer compete on just rate. Millennial consumers also want a simple and efficient online lending process. They want the ability to self-educate on the best lending option for them with little human interaction. However, when they finally speak with a loan officer, they want to be treated like a valued client and not just another number. Over the past few years, we’ve seen larger institutions invest heavily in beefing up their web presence, creating mobile apps, and developing an efficient online lending platform. Now, that trend is filtering to the local banks and credit unions.