2024 Auto Finance: Thriving in a Digital Shift
In 2024, the automotive finance departments are set to navigate through a period characterized by gradual sales increases, heightened inventory levels, and the continued electrification of vehicles. With a modest growth projection of 2.0% in sales volumes, reaching 15.9 million units in the U.S., dealerships have an opportunity to leverage this environment by understanding market dynamics and customer behaviors more deeply.
Car financing trends indicate a pivot towards digital solutions, reflecting broader shifts within the automotive retail industry. Banks have shown improved efficiency in processing car loans, reducing turnaround times and loan rejection rates. This improvement in financing processes is part of a larger trend towards digitalization that automotive finance departments can capitalize on by adopting digital tools for loan applications and customer interactions.
The landscape in 2024 also sees a significant recovery in vehicle supply, allowing consumers more choices and potentially better deals. Cox Automotive forecasts an increase in new-vehicle inventory, with incentives likely to rise and discounting to increase. This adjustment is expected to exert a downward pressure on vehicle prices, potentially improving consumer affordability. Automotive finance departments can leverage these conditions by offering competitive financing options that match or exceed the attractiveness of direct OEM incentives.
Electric vehicles (EVs) are another crucial area for finance departments to consider. With nearly 100 battery electric vehicle (BEV) models expected to be available by the end of 2024, the EV market is rapidly expanding. This diversification in EV offerings presents an opportunity for finance departments to develop targeted financing packages that appeal to customers interested in sustainable transportation options.
Furthermore, the leasing landscape is undergoing changes, with leasing penetration slowly rebounding. This scenario presents an opportunity for finance departments to focus on customer loyalty and retention strategies through lease-end engagement and personalized action plans for lease returns.
To adapt and thrive in 2024's automotive finance market, departments need to focus on enhancing digital financing solutions, understanding and adapting to consumer preferences, leveraging data analytics for targeted marketing, and developing strategic financing packages for an increasingly diverse vehicle inventory. By embracing these strategies, automotive finance departments can navigate the challenges and capitalize on the opportunities presented by the current market conditions.
As automotive dealerships adjust to the evolving market dynamics of 2024, the importance of strategic training and consulting cannot be overstated. This is where Automotive Training Network (ATN) steps in, offering a comprehensive suite of services designed to empower dealerships in navigating the current landscape. ATN specializes in providing tailored training programs that address key areas of dealership operations, from sales strategies that align with today's consumer buying behaviors to financial services practices that leverage the latest trends in automotive financing. Whether it's embracing digital transformation in the finance department, optimizing inventory to meet consumer demand for electric vehicles, or enhancing customer engagement through predictive marketing, ATN's expertise can help dealerships not only meet but exceed their operational goals. With a focus on fostering excellence across all departments, ATN's solutions are perfectly positioned to assist dealerships in maximizing their potential in a competitive and rapidly changing market.