Predictions, Trends, and Things to Watch for in 2021
Insight from each person is offered via a short audio interview or written prediction on this page. You can play the audio from this webpage or you can <right click> <save as> to save the audio to your device.
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Audio and Written Predictions Follow
Chris Macheca, President and COO – PassTimeGPS.com – DOWNLOAD AUDIO HERE.
Kenny Atcheson, Marketing Savant, Speaker, Author – DealerProfitPros.com – DOWNLOAD AUDIO HERE.
Jim Jackson, Motivational Expert, Speaker, Author – JimJacksonLive.com – DOWNLOAD AUDIO HERE.
Bill Neylan, President and CEO – TaxMax.com – DOWNLOAD AUDIO HERE
Mike Smukula – DOWNLOAD AUDIO HERE – Mike was a successful auto auctions Operations Manager but that is not why we hosted this interview. Mike was referred to us because of his fabulous outlook on life after horrific personal tragedy. The year 2020 was hard on a lot of people. Mike has been through much worse. We thought that sharing Mike’s positive attitude could provide a pick-me-up to many. He has some words of encouragement for everyone who has suffered in 2020 and 2021.
In 2004, an older man who was moving an SUV on an auction lot suffered a “medical incident” at the wheel and died. The vehicle plowed into Mike, crushing his skull. He had multiple internal injuries. Mike was also recently diagnosed with cancer. There is more. Listen to the interview and find out. (Update: Mike passed away in 2021)
Written Predictions
Nick Zulovich, Editor of SubPrime News and BHPH Report – Autoremarketing.com – Just like their customers need credit and financial resources to maintain monthly payments and keep their vehicle, buy-here pay-here dealerships likely are going to lean on capital availability and free cash flow even more this year to maintain their operations.
First off, vehicles are quite expensive in the wholesale market. After nose-diving at the onset of the pandemic, wholesale values have rebounded to the point of being equal to or even surpassing what they were before the COVID-19 impact arrived. Operators are likely stretching their ACV parameters to find vehicles that they can retail and still fulfill their underwriting criteria for their related finance companies.
Furthermore, operational costs are likely to rise too, especially in the compliance realm. With President Biden now in office and changes in leadership at both the Consumer Financial Protection Bureau and the Federal Trade Commission, renewed enthusiasm for policing the automotive industry isn’t too much of stretch. Operators might need to reinforce their compliance resources to meet any new mandates from federal and state regulators.
And if that wasn’t enough, nationwide unemployment remains significantly elevated, particularly within service sectors where buy-here pay-here customers often hold jobs.
Challenges might be ahead for buy-here pay-here operators, but their propensity to be nimble and resilient should again serve them well.
Nick Zulovich is senior editor of SubPrime Auto Finance News and BHPH Report, and can be reached at nzulovich@cherokeemediagroup.com.
Scott Carlson, “The Lot Rat” – AutoZoom.com – During my five decade experience in BHPH, I have learned that each first fiscal year following any presidential election usually turns out to be fairly robust. The COVID pandemic has changed consumer expectations. They desire to do most all of their shopping online and that includes the application for credit process all the way to closing. Dealers who meet these new customer expectations will see greater sales than those who do not. Many 2020 subprime customers will fall into the BHPH credit tier in 2021 due to the pandemic impact on their lives. Government COVID stimulus packages may cause the traditional BHPH peak season to go on longer than usual. Just as it happened in the year following the 2008-2009 economic crash, the supply of used vehicles in the market will increase when new car sales increase to pre-COVID levels…thereby producing more trade-ins. So, dealers can expect used vehicle wholesale prices to normalize once BHPH peak season transitions into the summer sales period. Traditional used car retailers can expect to see Carvana, Varoom and Shift to claim more and more market share because they continue to improve the customer experience with their online showroom and ease of buying vehicles using only their smart phone.
If you like to take notes while listening to the audio interviews or make highlights, all of the transcripts can be downloaded here.