New challenges and opportunities are on the horizon for the auto industry. Many of these challenges and opportunities are a result of changing consumer behavior. In order to adapt and succeed, the auto industry should stay informed about these behaviors, while also striving to connect with customers. Let’s examine the emerging trends in the automotive industry below.
In terms of challenges, delinquency and fraud are rising threats. 1.5% of all auto loans and leases from January to November 2024 ended up as auto delinquencies of 60+ days past due. This is an increase in delinquencies of 4.5% YoY. Certain generations are feeling the stress more than others; for example, 2.3% of auto loans among Gen Z result in 60+ delinquency, whereas only .7% of loans among Baby Boomers result in delinquency.
Fraud is also increasing, which is resulting in significant economic losses. For instance, there has been a 59% increase in synthetic identities since 2020. In 2023, rises in synthetic identities led to $7.9 billion in losses.
Customers face additional challenges, as interest rates and prices are on the rise. Between 2016 and 2024, there has been a 34% increase in vehicle price. During the same time period, interest rates rose by 56%.
One adaptation that can help customers and dealers alike is focusing on seamless customer experiences. This allows auto dealers to identify their most interested and qualified customers, while also improving the buying process for the consumer. This is a big deal, as 72% of consumers report that they would visit dealerships more often if the buying process was improved.
Delinquencies, fraud and increasing prices are making the auto industry difficult to navigate. Luckily, there are solutions. Getting to know the customer and ensuring positive buying experiences streamlines the process for buyers and sellers. Companies such as Equifax can assist dealers with customer connection, while also avoiding fraud. Equifax does so by being proactive, delivering buying power insights and securing the buying experience. These are all useful steps to take, and can help dealers overcome new challenges.
