Category: Economy

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Economy EFG Companies Profit Participation Reinsurance

Have Confidence in Your Reinsurance Strategy

I love fall! As a native Midwesterner, I find that the crisp air and fall colors bring a sense of energy and enthusiasm for all things outdoors. But as a CPA and reinsurance expert, this time of year also brings another type of enthusiasm for some of us – it’s the time for strategic financial assessments and evaluations and aligning them with our short and long-term business goals.

For retail automotive dealer principals, fall means more time spent on number crunching (versus leaf crunching) to get a clearer picture of their actual personal wealth positions. Given the challenging business conditions this year, taking a closer look at those key positions is an important strategic move that could prove beneficial in the long run. Let’s look at a few factors that will impact overall wealth positions.

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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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Dealership Training Economy EFG Companies Electric Vehicles Industry Trends

Educational Revenue Opportunities

Attention agents – it’s time to dust off your playbooks, education resources, and training best practices. Your retail automotive and powersports clients are going to need some knowledge in order to have a successful second half of 2023. Gone are the days when sales teams simply responded to pent up demand and took orders for units. Economic headwinds and rising interest rates are prompting consumers to delay purchases. And growing inventories are erasing those healthy margins logged over the last three years. Agents who focus on electric vehicle (EV) education, debt protection products, and sales best practices will prove invaluable to dealers who need to ramp up their level of customer service for a profitable close to 2023.

Let’s look at some of the issues facing your clients – and how you can help them overcome the challenges.

According to Kelley Blue Book and Cox Automotive, May new vehicle inventory reached its highest level in two years. The average listing price ended the month at $47,172, four percent higher than a year ago. To add insult to injury, interest rates on auto loans also continued to climb in May. Your dealer is working with a lot full of high-priced vehicles and consumers who are increasingly uncomfortable taking out a loan for a new car.  These challenges spell opportunity for agents to serve as the trusted resource for dealers, providing their staff with the tools and resources to make the most of every sale and maximize revenue opportunities.

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