This year, the auto finance market will see significant changes and need to prepare them for such changes. The primary reason to make such changes is that all of the four future states will coexist in the market. It is for this reason the auto lending companies will need to make changes in their lending policies so that they can serve to a diverse and wide range of customers.
There will also be a significant change in the customer behavior as well noticed due to such changes in the auto market, the lending policies and practices. As far as the customers are concerned the shift may be in consuming and purchasing transportation in the most dramatic ways.
To cope up with all these changes, the auto lending market will need to resize and specialize their business and redraft their lending policies in order to cater to a comparatively smaller market overall.
Experts and critics in auto finance industry point at the change in behavior of the consumer that has compelled the auto finance market to make the necessary amendments. They say that:
Based on these specific parameters, they determine whether or not they will be able to afford such huge monthly payments. They ask the right questions to themselves to find out whether they can truly afford a car that will cost them more than $30,000 which in reality will start the depreciate in value the moment it is pulled out from the lot.
The change in consumer behavior, as several experts point out, is also the result of the instant gratification. This is actually the consequence of the easy availability of car loans and the far liberal lending policies than before.
That means if you want to own the shiny new car model your neighbor has just bought, you cane easily and confidently walk through the door of your local car dealer and ride out in your own car a couple of hours later!
However, easy as it may seem the auto lending market has made instant gratification, people are more conscious now with their borrowing approach. They consider the rewards in both the short term as well as in the long term and if they see they see that their retirement account is not growing as it should be, they may back out from such impulsive purchases.
However, in a few cases it is seen that such an approach has dual effect on the auto lending market as well as the consumers, of course in a different way.
That means in the end of the day, the shift in the behavior of the consumers in new car purchases is killing both, irrespective of the reasons behind them.
With all those considerations mentioned above and judging the fact that most of the people are struggling to get moving ahead, there is an immediate and inevitable need to change their mindset regarding new car. This must be done once and for all. However, the question is how you can bring in such a change in your mindset.
As it is pointed out earlier, the primary issue that could be keeping you back from making such a change in your new car mindset is instant gratification that you are unable to delay, for some reasons.
These people are considered to take on a loan without considering the long term effects of it especially. It is this set of mind that they need to change so as to make the most of the auto lending market.
The future of the auto lending market may apparently look bleak, considering the fact that the consumers are now more conscious about taking out a loan. These changes in consumer behavior will surely shrink the volume of loans made by these finance companies in a year significantly.
However, the rise in sales and demands of the autonomous car fleets may also force them to steer course of their lending to cope up with the deficit. It is for this reason they will need to prepare them well to survive in 2019 and beyond.