Categories
Business Growth Economy

Flat Auto Sales Doesn’t Have to Mean Flat Loan Volume

Steve Roennau Vice President Compliance EFG Companies
Contributing Author:
Steve Roennau
Vice President
Compliance
EFG Companies

The National Automobile Dealers Association predicts new unit vehicle sales to top out at 17.7 million in 2016, which equates to less than 1% increase from the 17.5 million units in 2015. Industry experts across the board are expecting auto sales to plateau because of rising interest rates, increased regulatory compliance costs, and wage and income pressure. But that’s not to say there isn’t money to be made.

17.7 million units is still vastly greater than the 10.4 million unit sales from 2009. If anything, it marks one of the strongest recoveries the retail auto industry has ever experienced. With that in mind, there is still plenty of opportunity to increase loan volume, especially in the subprime market.

That’s right, I said there is opportunity in the subprime market. Even with rate increases and flat wage growth, the opportunity to increase loan volume and better protect your loan portfolio is there for those willing to look for it.

With the Federal Reserve slowly raising interest rates, everyone is on alert to see if and how economic setbacks will affect the subprime market. After all, economic downturns tend to hit the subprime demographics first, with sustained impact.

Categories
Featured

Enterprise Financial News – Volume 10

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Categories
Economy

If Your Customers Can’t Pay, You Will!

 

Mark Rappaport President EFG Companies
Mark Rappaport
President
Simplicity Division
EFG Companies

According to a recent survey from Bankrate.com, 63 percent of Americans say they are unable to handle a $500 car repair bill; and, only one out of five consumers making less than $30,000 said they had enough emergency savings set aside to handle an unexpected bill.

In addition, a Pew Charitable Trusts study found that six out of every 10 American households reported experiencing a financial shock during the last year, with major car repairs and lost income ranking among the most common.

What does this tell us? That those rosy figures of economic growth don’t match the current financial stresses of Americans. The fact is, with inflation increasing the costs of food, healthcare, clothing, utilities, etc., and slow wage growth, many Americans are finding it more difficult to pay in to their “rainy day fund”.