The opinions of business leaders including company chief executive officers, directors, chairmen and presidents paint a detailed picture of a developing and dynamic market. Their views are revealed in White Clarke Group’s new US Auto & Equipment Finance Survey 2017. To view the report click here.
This research shares recent industry statistics from local trade associations as well as featuring views and predictions from 20 well-known industry leaders.
It reveals that the arrival in the White House of arguably the most business-friendly administration in history has sent business and consumer confidence soaring, but the impact of pre-election promises in terms of regulatory reform, fiscal changes and federal spending has yet to be fully felt.
Businesses are looking to President Trump to deliver the enhanced economic growth that was a core promise of his election campaign, but there is an element of uncertainty about how the market will develop in the long-term.
In the new vehicle market, while new vehicle sales are set to falter slightly this year, there is still a strong appetite for new cars and light trucks, funded through cheap finance options and low interest rates.
The National Automobile Dealers Association (NADA) is forecasting total sales of 17.1 million new cars and light trucks in 2017 and although this will represent a fall in demand, it is still expected to be one of the highest performances on record.
Ongoing demand is being funded predominantly through finance, with Experian reporting the average loan amount for a new vehicle reaching a record high last year, of $30,621; while used vehicles also achieved new peaks at $19,329 per vehicle.
The rise has caused concern in some areas about the level of debt being taken on by consumers, with the auto loan market now accounting for more than $1.1 trillion.
Although there are fears about vehicle oversupply and its impact on used asset values, the indications are that the market remains robust.
At the same time, the re-emergence of small and regional banks looking to expand services to existing manufacturers, dealers and retailers is continuing to spur growth in the dealer floorplan finance market.
In the equipment leasing segment, there is a confident atmosphere, as new business volumes increase to reflect stronger economic activity.
Figures from the Equipment Leasing and Finance Association (ELFA) show an acceleration in new business volumes during the first half of 2017.
Ralph Petta, ELFA president and CEO, said: “Business owners are taking advantage of low interest rates, favorable employment data, an equity market that continues to defy gravity, and other solid fundamentals to replace aging assets and, in some cases, expand operations, requiring installation of new equipment.”