Providers & Administrators, 1st Qtr 2019

10 P A 1ST QTR 2019 2019 will take off where 2018 left us with lots of dealers trying to understand what exactly digital retailing means and how to provide the consumer a better online experience prior to going into the dealership said F I Express Reed who sees reduced customer wait times as a key benefit The online experience will include sale and presentation of F I products with the sale happening at the dealership For all the advances in digital retail and finance car buyers may not be as eager to leave the dealership as some may think Cox Automotives latest study of car buyers released in early 2018 found only 11 of respondents wanted to take delivery and sign their paperwork remotely Everyone wants a frictionless transaction process and to be able to provide a track for consumers to run on when buying their car but the realities are mixed The bottom line is that consumers are not comfortable yet and they still want a tangible touch on the vehicle said Maxim adding that the human touch remains an essential part of the transaction For that reason among others Dealers will remain strong and there are a lot of opportunities to enhance the experience and build technology that will serve people seamlessly inside and outside the dealership Maxim described the ongoing advancement and integration of a wide array of dealership systems as building an ecosystem ACEs Van Over has taken notice as well and he believes a more fully realized ecosystem could pay dividends during the next downturn Digital solutions have so many benefits that a growing number of dealers and managers are discovering Van Over said Since efficiency is one of the benefits if sales slow down dealers should look at digital solutions to save money Mosaics Ganther noted that service contracts like any other financial commodity are distinguished by price and face inherent downward pressure Technology can change all this If a service contract is unique because of technology that supports it or connects it to consumers it ceases to be a commodity at all If you want it you can only get it from the technologys owner This supports higher margins Ganther said using EasyCares SAVY a mobile app based suite of dealer and customer facing solutions as an example Will SAVY take off Its too early to tell But if I were in the F I product business rather than just watching from the press box Id keep an eye on its fortunes It could be the first cyborg F I product and a game changer Kasprzycki noted that to drive progress forward Administration systems need to be able to support all parties and give them real time access to the information via computer and of course mobile devices Kerper and Bowrons John Kerper agreed that more of the F I process will take place online in 2019 adding that For dealer reinsurance we see interest in onshore domiciles replacing offshore domiciles ARMDs Tuno said that he will keep an eye out for solutions that introduce car buyers to F I earlier in the sales process Earlier may mean changing when F I is introduced to the consumer during the sales process and how it is introduced I call this a shift from a linear process to a concurrent process This will likely be one area to observe in 2019 in addressing the trend in F I whether through the use of technology or not Dealerships need to adapt to these changes or risk falling behind Lane said Its very important for the finance division and dealership division to be in sync to exceed profit goals and lead to more satisfied customers Those that fail to keep up will face a competitive disadvantage Kansanback said and the days of springing F I on customers only after theyve picked their vehicle are numbered I believe a few years from now we will look back at how we handle that information today and we will be stunned he said Penetrations will be impacted so we are going to have to be smart and strategic every step of the way RULES AND REGULATIONS The Trump administration has brought some relief to the heavily regulated automotive industry including a restructuring of the federal Consumer Financial Protection Bureau But our experts urged caution Attorney and accountant David Kaseff pointed to reinsurance as one segment that will continue to face adjustments following the passage of President Donald Trumps signature tax reform legislation The major changes in tax law are affecting the F I space and reinsurance and will continue to have an impact especially when it comes to the structures and participation of dealers in their F I programs Its important for dealers to understand how the changes to the international rules relating to tax deferral will affect them not only in 2019 but beyond as well Kaseff said As the IRS and Treasury issue more guidance the landscape will continue to change Tuno said a Democrat led House of Representatives will make the regulatory landscape more challenging in 2019 as will increased activity among state regulators and class action attorneys A national law to follow the European Unions General Data Protection Rule and stricter Unfair Deceptive or Abusive Acts and Practices standards could also be on the horizon When trying to predict the behavior of the automotive industry the real challenge is in the wild cards