Pentup demand seems like a clicheacute by now ldquobut it still has legsrdquo Wall says

Pent-up demand seems like a cliché by now, “but it still has legs,” Wall says.

Most Polled Lenders Say Auto Financing Will Increase

About 14% say they expect a decline, 24.4% expect no change and 7.1% aren’t sure. 

LAS VEGAS – More than half of surveyed auto lenders say they expect their auto-financing originations will increase this year.

If they are right, that would easily put outstanding auto-loan portfolios in the U.S. past the $1 trillion mark, a record. Experian expects that to happen by mid-year. The number stood at $987 billion at the end of 2015.  

Using remote-control devices during electronic polling at the American Financial Services Assn.’s annual Vehicle Finance Conference, 54.5% of attendees say they expect their origination volumes to rise this year.

About 14% say they expect a decline, 24.4% expect no change and 7.1% aren’t sure.

A hot topic of auto retailing today is how quickly the car-buying process takes at dealerships. Some industry people say it takes too long. They say an hour is something to shoot for. Conversely, others say a 60-minute car deal is rushing things.

Asked what top customer priorities are, 35.7% of polled conference attendees say speed of the transaction. That tops the list, followed by pricing and convenience (tied at 26.2%), financing (4.8%) and dealership inventory and staff product knowledge (tied at 3.6%).

Asked to name the biggest challenges facing their business, 33.6% say changing or aging technology, followed by competition from other sources (22.4%), changing consumer behavior (19.1%) and the future of ancillary products (15.8%).

The last item refers to concerns that the Consumer Financial Protection Bureau may push for price caps – or the equivalent – on F&I products such as vehicle service contracts and protection plans.

Most attendees say they expect a 60-day delinquency rate of 0.77% this year. That compares with 0.72% last year.   

The National Automobile Dealers Assn. predicts light-vehicle sales of 17.7 million this year, and 53.1% of polled conference attendees agree with that, with 31.5% saying it’s too high and 15.4% saying it’s too low.

WardsAuto is forecasting sales of 17.8 million units this year. So is IHS Automotive.

“Pent-up demand seems like a cliché because it has been talked about for such a long time, but it still has legs,” Mike Wall, IHS’s director-automotive analysis, tells the AFSA conference. “We still believe there’s room to run.”

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TAGS: Dealers
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