Looking Ahead to the New Year
2017 is underway, so let’s take a moment to share what we’re looking forward to in the upcoming year.
First, we are preparing for the NADA forecast that calls for around 17.1 million new vehicles in the next 12 months, which is on par with 2015 and 2016 numbers. As Steven Szakaly, NADA’s chief economist, noted, we are moving into a market that is more stable and steady. There is no “pent up” demand, so the market will continue to turn over cars at a rate that is more predictable from month-to-month, and year-to-year. That being said, the overall economic forecast is strong, with Szakaly projecting gross domestic product growth at 2.6%, employment growth between 150,000 to 180,000 per month, and the price for regular-grade gasoline at less than $2 per gallon. Interest rates will be another factor to watch, which can have a significant impact on both the overall economy and on vehicle sales.
For the F&I industry, we see a strong year ahead. We believe the push to increase F&I income will continue, raising the bar for finance operations to generate a larger percentage of front-end profit for dealerships. We don’t see that happening from an increase in VSC penetration or higher finance reserve margins; we see it coming from an increase in vehicle protection products that offer consumers a clear value proposition.
And on that front, it’s clear a change is coming – actually, it’s already underway – where F&I product information becomes more accessible to the general public. RoadVantage recently started a YouTube channel with two goals in mind: to produce content that is available online and on dealers’ websites for the average consumer who is researching car purchases, and also to provide a valuable resource for F&I managers looking for ways to introduce and explain their products in a way that clearly demonstrates the value proposition in layman’s terms. We will continue to create content with these purposes in mind, and we believe the industry will start seeing quite a bit more information about F&I in general, as well as details on specific products, online in the coming months.
For RoadVantage, 2017 is going to be an exciting year for us. We have new products in the works that we believe will address niches that aren’t currently being served. We will continue to hire some of the best people in the business, and encourage them to put all their talent and passion into everything they do. We will continue to serve all our customers — whether they are dealers, agents or the consumers themselves — with products we stand behind 100%, and service that we believe is second to none.
2016 was our 5-year anniversary, and in those few years, we have made amazing strides forward – both for us and for the industry. 2017 begins the second half of our first decade, and we are tremendously excited to see where it takes us, and the F&I industry as a whole. We wish everyone a very happy, healthy New Year and can’t wait to serve you in the coming months!