Survey shows confidence in the auto market, Ford increases dealership floorplan help, dealers lean into AI

Hey everyone. Subprime auto loan borrowers are still facing pressures—

And despite a jump in 2024 loan modifications, the share of auto asset-backed below prime loans 60-89 days past due did not improve as expected…

The good(ish) news? An increasing number of consumers are still managing to make payments before defaulting entirely.

— CDG

A recently released Santander US survey shows recession fears easing among consumers—with two-thirds expecting a stronger job market next year.

Consumer confidence is also growing—76% anticipate financial improvement, and most plan to save or pay down debt.

On top of that—despite elevated car prices, demand is holding. 45% are considering a vehicle purchase this year, and Bank of America estimates there could be as much as 10 million units of pent-up demand.

Bottom line: If inflation cools, sales could accelerate in what Cox Automotive’s Chief Economist Jonathan Smoke calls a “Goldilocks” economy … (Go deeper: 2 min. read)

Ford is increasing floorplan assistance by 25% to help dealers struggling with rising inventory costs.

Driving the news: Starting in April—dealers will get an upfront credit worth 1.25% of a vehicle’s sticker price on most gas models, up from 1%.

With the average dealership market days’ supply sitting at 113 days, this move could provide much-needed relief.

And dealers are welcoming the change, with Ford’s National Dealer Council calling the move a “big, big deal” … (Go deeper: 4 min. read)

Courtesy transportation is no longer a nice-to-have.

It’s a need-to-have.

A 2024 Car Dealership Guy poll on X found that 31% of respondents prefer an Uber ride to get home when dropping off a car at the dealership.

With Central from Uber for Business, you can request on-demand courtesy rides for your customers, even if they don’t have the Uber app. Coordinate one-way or round-trip rides, monitor trips in real time, set spend caps, and generate reports in one dashboard.

Uber for Business is an easy way to provide an experience customers love, while reducing the costs associated with maintaining shuttles and limiting the liability of loaner vehicles.

According Cox Auto, AI-powered tools, like digital credit applications and automated service scheduling, can cut buyer wait times by up to 49 minutes and free up staff for more personalized service.

But execution matters.

AI can streamline operations—however, if poorly implemented, it risks frustrating customers.

And With 81% of dealers increasing their AI budgets this year (per Fullpath), the real challenge is ensuring automation enhances, rather than replaces, the human experience … (Go deeper: 4 min. read)

Thanks for reading everyone.

— CDG