Category: Business Growth

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Business Growth Economy

The Rat Race is On!

Mark Rappaport President Simplicity Division EFG Companies
Contributing Author:
Mark Rappaport
President
Sinplicity Division
EFG Companies

In 2016, we all held our breath to see how the presidential race would turn out, with everyone saying that those results would affect the economy. In the aftermath of President Trump’s win, we watched the “North Star” of the health of an economy – the stock markets – and they rose, hopefully signifying good times ahead.

Nevertheless, the heated political atmosphere continued past 2016 and into 2017. Now, you can’t listen to the radio, turn on the T.V., read a newspaper, or open a social media app without seeing articles about the current administration and whether or not it is successful. No matter if you are a Republican or Democrat, Trump or Clinton supporter, if you’re a lender seeing these stories proliferate, it probably gives you pause on whether the economy can weather this storm.

According to the National Automobile Dealers Association (NADA), U.S. new vehicle sales are expected to stay above 17 million in 2017, roughly on par with last year’s levels. On all accounts, it currently looks like we’re still on track to meet those expectations. As a lender, you probably expect to receive roughly the same loan volume as you did last year. However, economic factors like the heated political atmosphere could have lasting repercussions on your loan volume.

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Categories
Business Growth F&I

A Revolution is Coming

Mark Rappaport President Simplicity Division EFG Companies
Contributing Author:
Mark Rappaport
President
Sinplicity Division
EFG Companies

Can you remember the last time you walked into a fast food restaurant and they filled your drink order? It was a short few years ago when the restaurants started handing you a cup and you dispensed the ice and your drink of choice.  The shift happened as consumers demanded a better, quicker experience.  Now, order kiosks are being introduced to eliminate further wait time.

While established dealership vendors have built iPad and Docupad platforms to improve the overall customer experience in the transition to F&I, this segment of F&I technology is about to burst with robust competitive offers. Startups are now beginning to appear on the scene with full online financing capabilities. In addition, manufacturers are now investing in online financing technology.

In December of last year, AutoNation launched its first online financing offering, allowing customers to value a trade-in vehicle, determine payments and apply for credit.

In June, CarMax, Inc., the biggest U.S. used car dealer, announced the rollout of a new online financing initiative to help customers pre-qualify for financing before entering the dealership.

In October, Automotive News reported on a dealership in California that was using Express Storefront, an online-buying platform from Roadster that allows shoppers to select a vehicle, get approved for credit, sift through F&I options, and set up vehicle delivery.

Even Equifax is dipping their toe in the online financing product market. This past month, John Giamalvo, the vice president of dealer services at Equifax, spoke at the National Remarketing Conference, discussing his company’s soft-pull tab for dealership websites that allows customers to get a free credit report without affecting their credit. In his presentation, Giamalvo stated that he sees growing evidence that car shoppers are ready to do more of the financing process online.

Also in November, a partnership between Drive Motors, RouteOne and Dealertrack made headlines with a collaboration that resulted in an online checkout feature for dealership websites. The feature allows customers to structure their deal online before finalizing and taking delivery of the vehicle. This creates a 24/7 sales funnel, where customers submit their information at any time of day or night. The information automatically populates into the dealership’s Dealertrack and RouteOne platforms, saving an enormous amount of time in the store.

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Categories
Business Growth Economy

Benefits of Leasing CPO Programs

Dave Gibbs Training Manager EFG Companies
Dave Gibbs
Training Manager
EFG Companies

According to the NADA Used Car Guide, more than 3 million vehicles will reach the end of their leases in 2016. This represents a 35 percent jump in off-lease volume. With such a huge increase in reliable, late-model, pre-owned vehicles, the industry has already seen used vehicle prices drop to become more competitive. Now, dealers are more concerned with maintaining front-end profitability while still being competitive.

Meanwhile, lenders are dealing with their own competitive struggle. Many are watching the auto finance market closely to determine when to tighten lending requirements. Some are already beginning to pull out of the subprime space. And, all lenders are determining how to remain competitive while also being compliant with the Consumer Financial Protection Bureau.

Outside of rates, one of the best ways to remain competitive in the auto finance space is by helping dealers accomplish their profitability and competitive goals. With a higher pre-owned inventory, more dealers are looking to utilize certified pre-owned (CPO) programs to differentiate their offerings and increase front-end profitability.

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