Vice President
EFG Companies
In a widely anticipated decision, the Federal Reserve voted to raise interest rates this past December by 25 basis points.
And, of course, one of the first industries that will be affected by this rate hike is auto finance. As you re-assess your lending portfolio to take into account the new rates, it’s also the perfect time to evaluate how to differentiate your institution beyond rate alone.
With the interest rate hike, we can expect retail auto sales to begin to plateau in 2016. It wouldn’t be surprising to see little to no growth in overall unit sales next year. This trend will shape dealer business, as they will begin focusing more on customer retention and brand enhancement. This refocusing offers lenders the chance to differentiate their institution and grow loan volume through their engagement with dealers. The more business a given dealer has, the more opportunity you have to increase loan volume. Therefore, every lender should ask themselves, “How am I helping my dealer partners achieve their business goals?”