While EFG Companies sees some market strength and positive economic and consumer trends, experts acknowledged slow inventory growth, price concerns and stubborn inflation have the potential to create revenue barriers in the second half of 2023 for the retail automotive and powersports industries.

Company leaders recommended that dealer principals, agents, and finance companies approach the remainder of the year strategically focused on a return to customer-first sales methods that emphasize education and value, along with employee training to ensure effectiveness and retention.

“While we have seen strong growth in many retail markets, some persistent challenges remain that are preventing buyers from purchasing the vehicle of their choice,” EFG Companies chief revenue officer Eric Fifield said in a news release promoting the distribution of the comapny’s midyear automotive and economics report.

“Savvy dealer principals, lenders and agents will ramp up customer engagement and employee education. Regardless of how market factors play out, numerous opportunities for revenue remain for the remainder of 2023,” Fifield continued.

Fifield and other executives from EFG Companies emphasized that cash-strapped consumers need added value and protection for their bank account in their next automotive and powersports purchases.

To reinforce their position, they offered this hypothetical scenario, looking at the benefits of a single purchase with asset protection with a finance company officer closing a contract featuring six months of complimentary vehicle return on a car retailing for $20,000:

—The consumer did not put a down payment on the car, so they are driving off the lot with a $20,000 contract.

—The consumer makes four monthly payments of $500 and subsequently loses their income via one of the covered circumstances. At this point, the contract balance is 18,000.

—The customer returns the car to the dealership, which buys the car back at its current market value, $13,500.

—Then the vehicle return benefit kicks in, paying the provider the remaining balance of $4,500. The contract never defaults, the consumer’s credit remains intact, and the finance company reduces any potential recovery expense.

“Fortify your loans and protect your margins by strategically choosing consumer protection products to pair with your loans. Strong finance products not only generate more loan applications and approval, but also may help protect you by reducing risk,” EFG Companies said in its report, which can be found online here.