ARLINGTON, Texas -

Perhaps independent dealerships and buy-here, pay-here operators aren’t expecting to see their vehicles roll over the curb at the pace previously seen in recent years. 

The economic and corresponding retail sales growth expectations of independent dealers were a bit more subdued to begin 2018 than a year earlier, according to the National Independent Automobile Dealers Association’s business confidence survey for the first quarter.

The survey, taken in the first quarter of 2018, found 42 percent of the respondents said they expected economic conditions to improve in the quarter ahead, down from 63 percent in the 2017 Q1 survey. Retail sales growth expectations fell to 50 percent from 70 percent a year ago and 67 percent in the previous quarter.

In addition, the percentage of dealers who expected an increase in their cost of doing business rose from 57 percent in the fourth quarter of 2017 to 66 percent, despite the tax reform bill passed in November.

NIADA shared that optimism for increased cash flow and availability of auto finance resources also fell, with cash flow down 21 percent and finance availability down 34 percent from the previous year.

Survey orchestrators explained that trend was due in part to a sharp pullback in auto finance company investment in the subprime paper market as a handful of independent auto finance companies left the market completely.

In fact, dealers cited less access to the number of lenders as well as tighter restrictions to qualify buyers for financing (29 percent each) as the top reasons why it's been difficult to finalize underwriting for their customers.

NIADA went on to note that expectations of more consumer traffic dropped to just 41 percent from 71 percent in Q1 of 2017 after a negligible .02 percent year-over-year increase in consumer retail sales in the first quarter.

The association acknowledged that sentiment could be the result of a delay in tax refunds, prompting households to put off spending early in the year. However, tax withholding was reduced to account for the new tax cuts, which might lead to more spending down the road, according to NIADA.

Officials went on to add that the expectation of rising expenses also showed up in dealers' perception of the single most important problem facing their business — 22 percent said it was the increased cost of doing business, more than any other issue. Concern over the lack of auto finance resources rose from single digits throughout the past year to 12 percent.

The overall picture shows NIADA members expected business to stay steady with no major uptick in customer traffic or corresponding sales heading into the mid-year of 2018.

Two major factors are likely to dictate the outcome of this quarter: The availability of auto finance resources and consumers potentially opening their pocketbooks as they see the benefits of the new tax law on their household budgets.

Dealer operations and more are set to be discussed in more detail during the 72nd annual NIADA Convention and Expo, which is expected to be the largest event in the used-car industry thanks to NIADA’s recent acquisition of the National Alliance of Buy-Here, Pay-Here Dealers.

The combined NIADA/NABD Mega-Conference beginning on June 18 in Orlando, Fla., will include a record 60 education sessions in five educational tracks — retail, BHPH, legal and regulatory, certified pre-owned and digital marketing — and the largest Expo Hall in the event’s history with more than 210 exhibitors offering the latest state-of-the-art products and services designed to help dealers compete and succeed in today's ultra-competitive used vehicle market.

More details can be found at this website.