F&I and Showroom, NADA 2021

DEVELOPMENTS 10 F I and Showroom NADA 2021 ers will plan for a variety of strategies in 2021 keeping their teams nimble and customers squarely in their sights said Eric Fifield Chief Revenue Officer with EFG Companies Regardless of how these factors play out there remain numerous opportunities for revenue in the first half of next year Fifield and other executives from EFG Companies emphasized that consumers will continue to look for added value in automotive and powersports purchases Economic uncertainty exists on both sides of the negotiating desk added Fifield From the consumer demand for digital retailing to the impacts of a reinvigorated Consumer Financial Protection Bureau dealers agents and lenders must ensure their teams are trained to maximize value while maintaining the highest level of local state and federal compliance oversight THE KNOWNS AND UNKNOWNS IN 2021 There are several known economic components which can provide a planning framework for business owners The Federal Reserve has signaled that it will keep interest rates near zero through at least 2023 in an attempt to prevent the economy from sliding further into a pandemic induced recession Unemployment rates will continue to be high through at least the first quarter according to the Bureau of Labor Statistics Savings rates will also continue to be remain strong through the first quarter with consumers staying home and spending less Although the unknown factors could introduce volatility astute planning can result in market gains while increasing revenue EFG Companies executives and subject matter experts provide their experienced perspectives to guide clients toward the best outcome RETAIL AUTOMOTIVE Scott Kaskocsak executive vice president of dealer services said Overall unit sales will be very difficult to predict throughout the first half of next year The good news is that because of the pandemic and resulting manufacturing shutdowns new inventory is actually right sized for the first time in years As a result dealers currently are not swimming in excess and are expected to generate more front end new gross revenue in the near term However as manufacturers ramp up production we can expect a flood of new vehicles hitting dealerships later in 2021 Economic uncertainty will continue to make market differentiating F I products vital in the race to generate sales and revenue Todays buyers are more educated about the vehicle buying process and F I products than ever before and they are searching for added value and confidence in their purchase decision As consumer demand for an online or hybrid online instore sales model continues we can expect to see the technology for online retailing improve There are still significant roadblocks for the industry to overcome with regards to verifying identity and maintaining compliance in online transactions With that in mind we are already in discussions with clients to ramp up compliance training as we expect regulatory compliance oversight to be a focus of the new presidential administration INDEPENDENT AGENTS Adam Ouart vice president of agency services said Both the retail auto and independent agency industries experienced an increase in merger and acquisitions activity in 2020 prompting a reshuffling in businesses and relationships and a greater need for agents to provide demonstrable value to their dealership client base Pandemic restrictions also forced agents to adopt a technology based service model In 2021 agents have the opportunity to be the expert for their clients advising on everything from new products and digital sales models to training and compliance matters Those agents who effectively utilize their product administrative partners to provide a multi service model for their clients have a greater opportunity to acquire and maintain more clients by becoming a highly valued partner AUTOMOTIVE LENDERS Brien Joyce vice president of lender services said With interest rates remaining at near zero percent for the foreseeable future financial institutions will need to be creatively competitive to capture market share Lenders looking to differentiate themselves will need to build value into their auto loans with products such as WALKAWAY vehicle return Also with demand from both consumers and dealers for easier digital retailing lending solutions we should see lenders beef up their online lending solutions If a pandemic stimulus package is offered in the first quarter of 2021 we can expect pent up demand for vehicle purchases to result in greater opportunity to capture market share Lenders who actively promote their loans with value added products will gain the sale INDEPENDENT DEALERS Gary Biskup vice president of independent services said Independent dealerships experienced significant market share gains in 2020 competing nearly on par with franchise dealers as consumers sought more value in their vehicle purchase This trend will continue with strong revenue opportunities for those dealerships utilizing vehicle service contracts and certified pre owned protection products as market differentiators Independent dealers are no longer willing to leave money on the table by focusing only on front end profit via unit sales To maximize F I product revenue opportunities and further differentiate themselves in the market independent dealers are getting wiser about selecting their inventory buying vehicles that are still within factory warranty They are also emphasizing F I and compliance training FLEXIBILITY IN 2021 RECOMMENDED TO ADAPT TO MARKET UNCERTAINTIES continued from page 8 DEALERS AGENTS AND LENDERS MUST ENSURE THEIR TEAMS ARE TRAINED TO MAXIMIZE VALUE WHILE MAINTAINING THE HIGHEST LEVEL OF LOCAL STATE AND FEDERAL COMPLIANCE OVERSIGHT ERIC FIFIELD