Providers & Administrators, 1st Qtr 2019

12 P A 1ST QTR 2019 Braganini said its too early to tell what impact subscription services will ultimately have but the trend is coming for sure Ridesharing will continue to replace vehicle ownership and alternate methods of transportation will begin to take shape We believe the subscription economy will have little impact in 2019 and as the trends show it could start to have influence in the coming years Brennan said I see product development administrators getting more aggressive in addressing this change in the market Craigmile said Credit unions direct lenders call centers and dealerships would all benefit from long term profit opportunities and greater customer relations provided by the subscription model Craigmile noted that the underwriting piece is still complicated but will become easier to structure in time Kerper said the industry may have to break its addiction to single premium products to make that happen There seems to be a lack of suitable products for customers that arent financing so development of these products will expand Kansanback offered a different prospective challenging the industry to see the subscription model as a new revenue source One of the dealerships biggest challenges is retaining customers for their service departments I absolutely believe there is a market for a flat monthly fee program that entitles the customer to all the key services theyd like from the dealership Kansanback said Why couldnt we have 19 29 and 39 month packages that have a variety of services included BOLD PREDICTIONS Ganther noted that when trying to predict the behavior of the automotive industry the real challenge is in the wild cards What unforeseen forces could materialize to disrupt or derail auto sales or finance in 2019 Will President Trump exert more control or complete control over the Federal Reserve a messy prospect in Ganthers words Is impeachment a realistic possibility and what effect might that have on the economy House Democrats have vowed to impeach President Trump but the odds of their getting a two thirds vote of a Republican controlled Senate are zero Reality notwithstanding an impeachment process will grind D C to a halt for the duration Ganther said By itself an impeachment effort shouldnt be a drag on the economy Other pending investigations however might be What if Spygate generates high level indictments Or Uranium One Or Hillarys emails Or Benghazi Or all of the above The fallout could impact the economy in unforeseeable ways none of them good Again Im not saying any of this will come to pass Ganther added But the best way to win March Madness is to predict the upsets Remember what happened last year when No 1 seed Virginia met UMBC in the first round So predicting that politics will negatively impact the economy and with it the retail automobile segment is my long shot pick Van Over predicted that if sales slip in 2019 the efficient process driven compliance focused dealers will be better positioned to continue to be profitable with a lesser number of vehicles out the door Brennan said dealers will push back against the strong arm of the factory noting that The manufacturer participation programs are designed to make the manufacturer the lions share of the money I think the consumer buying process will remain the continued focus and the area where we will see the most changes especially in technology said Craigmile who believes the industry is a long long way from a shared goal of delivering a sold vehicle within an hour Many changes being made in F I and in the dealerships are to address that challenge and to get more and more of the process done online ahead of time or to make better use of the customers time while they are physically in the dealership waiting to go into the F I office That brings us to the subtopic of how we profitably sell F I products online and do it consistently Craigmile added Were getting there Kathinokkula predicted that 2019 will see more dealers take the steps toward ultimately becoming fleet operators They no longer want to sell vehicles They will allow consumers to subscribe to worry free subscription vehicle experiences he said Inevitably there will be winners and losers but we will definitely see a winning formula take shape by the end of the year Menu selling will start to become obsolete as we know it because the focus will shift to offering just enough products to the customer from the start of their online journey and end with the actual purchase at the dealership To be clear this will actually empower the new generation of F I managers not as some would fear or predict remove them from the equation Kathinokkula added Nagelvoort predicted increasingly high expectations for accessing and processing agreements in real time This includes agent commissions consumers wanting streamlined processes and dealers requiring real time reporting There are more products to manage and bundles are expected People want to access this at home or on their phones in addition to the computer at their office With over 250 million registered vehicles in the United States we see a lot of opportunity as long you have the right technology The longer term trends are away from retail and towards online towards electric towards autonomous vehicles and towards less ownership Bowron said While it is doubtful any of these will be significant in 2018 strategic thinkers need to be considering the long term impact of these shifts on the F I market In conclusion Quinn said F I is tantamount to a dealerships success and profitability If F I is not performing at a very high level every other department in the entire dealership is adversely affected