Revisiting the Trends

With the year half gone, we thought this was a good time to check in and take another look at the trends we touched on in our January blog post.

1. The Economy. We live in interesting times. It’s an election year. The United Kingdom just voted to leave the European Union, sending global markets plummeting, which even the automotive market isn’t immune to. These types of things lead to change in the future, and change holds moments of uncertainty. With that being said, this is one trend that everyone is just having to take a “wait and see” approach on, as things are rapidly changing from week to week, which in turn impacts the automotive industry both directly and indirectly. It will be very interesting to see the numbers at the end of the year to get an overall picture of how global issues have impacted our markets.
2. Leasing. Perhaps because of all this change in the world, consumers are still looking at leasing as a viable alternative to car buying, since it allows them to be more flexible and only lock themselves into a contract of a few years. In fact, leasing is hitting record highs and in most categories is exceeding the predicted 30{137f86425451f0eed4391b215cab1f0aedcc26ced4aeb45d9a5267c3194b8614} growth for 2016. We expect that trend will continue through the rest of the year.
3. Consolidation. There haven’t been as many announcements about new acquisitions or consolidations as originally expected thus far in 2016. 2015 was a fairly active year on this front, and while 2016 might not match that pace, the drive to consolidate hasn’t gone away.
4. Products. Bundling is still a hot approach in the F&I market right now, with dealerships trying to find the right product mix to entice consumers. The experts are saying that F&I revenue hasn’t necessarily hit its peak, but they are predicting the growth will slow, which means dealers and providers will need to be smarter about offering products that consumers truly find valuable.
5. Transparency. The pressure from consumers for F&I departments to provide all of the details up front, with no hidden clauses, fees or surprises is still going strong. F&I managers are trying to find new ways to clearly articulate the product’s features and benefits, and menus, in particular, make it easier for them to connect products to customer situations. Products like RoadVantage’s, where we strive to remove any “out clauses” and language that makes it easy for providers to declare something as “not covered” will increasingly be the types of products consumers will ask for.
6. Online Access. Which brings us to the push for providing more information about F&I products online. We predicted in January that the pressure to go in this direction will only increase, and that dealers and providers would need to start having more serious conversations about how to strike the right balance. We still believe that evolution is coming, and it is only a matter of time before consumer demand tips the scales.
7. Technology.The Internet isn’t the only piece of technology impacting our market, and eContracting, in particular, is an area we’re watching closely. More and more dealerships are starting to demand the capability, and we see that trend continuing not just through the end of the year, but for the foreseeable future.

RoadVantage is celebrating our fifth year serving this industry, with recognition and accolades from the industry validating our approach to F&I. We believe that the rest of 2016 should be an interesting ride, and we are looking forward to seeing how these trends play out before it’s time to start talking about what’s in store for 2017.