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.”