Author: efgmarketing

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Dealership Training Economy

Leasing On the Rise Again

Vehicle affordability continues to be the albatross weighing down vehicle sales in 2024. While a  joint forecast from J.D. Power and GlobalData reflects new vehicle sales rising 1.4 percent year-over-year to 1.21 million units, the average listing price in February was projected at $47,142. This amount is down one percent from early 2023. Regardless of this slight decline, when MSRP is combined with perniciously high interest rates, financing a new vehicle is still out of reach for a large part of the buying public.

But there is a trend worth noting that offers a glimmer of hope to the buyer who needs an affordable new vehicle – leasing! The Experian State of the Automotive Finance Market Q4 2023 reflects that the percentage of borrowers who choose to lease is up significantly. Leasing has always been popular with prime and super prime consumers. However, the auto industry saw a jump in subprime and near-prime leases as well.

Leasing Graphic from Experian
Source: Experian State of the Automotive Finance Market Q4 2023 Report
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Training

Training with a Capital ‘T’

Glenice Wilder

According to Wards Intelligence, U.S. light-vehicle sales softened in January after December’s strength. While January’s weaker results were likely a pull-back from December’s surge, affordability and inventory also played roles, with availability well below historically normal levels. At the same time, interest rates for financing purchases were at long-time highs, and the inventory mix on dealer lots is weighted toward higher priced vehicles.

Interest rates and inflation clearly put a damper on sales in 2023, but some positive economic news in January should prove beneficial. Consumer sentiment is showing signs of improving as inflation eases and gas prices drop across most of the country. Hiring picked up sharply in January as employers added a booming 353,000 jobs, highlighting a labor market that continues to defy high interest rates and household financial strains, while at the same time incomes of most Americans are growing.

Joe Langley of S&P Global Mobility notes the U.S. economy has shown a resilience that points toward growth “for the foreseeable future.” Sales of new vehicles should reach 16 million units this year, which is healthy but still short of the auto industry’s high-water mark of 18 million units set in 2018.

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Categories
Compliance

New CARS Rule Lesson: Go Back to F&I Training

Does it ever feel like once a year, compliance rears back up to take over the headlines, only to die down again? Well compliance is back and it is making waves.

At the end of 2023, the Federal Trade Commission (FTC) announced the Combating Auto Retail Scams (CARS) Rule, targeting unwanted products, services and so-called ‘junk fees’ added on to a car purchase.

The CARS Rule specifically provides protection for military and active-duty service members who, according to the FTC, are frequently targets for vehicle scams. The FTC states that service members have an average of twice as much auto debt as civilians.

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