In January, we identified five trends that experts said were likely to affect your finance and insurance business this year.
Most held up well. The last one -- new regulations from the Consumer Financial Protection Bureau -- didn't pan out. But it still has potential for 2013.
Here are the 5 trends for 2012 and how they fared:
1. More players mean more competition. The upside? Lenders will court dealers.
What happened: Subprime auto loans in particular took off in 2012, after lagging the recovery in prime-risk loans and in leasing.
Besides an increase in startups, established subprime lenders expanded during the year, including GM Financial, formerly AmeriCredit; Santander Consumer USA; and First Investors Financial Services.
Private-equity firms invested in subprime lenders in 2012. For example, Aquiline Capital Partners in New York announced in September it was acquiring First Investors in a $100 million deal.
According to DealerTrack, its network of just over 19,000 U.S. dealerships averaged 9.4 lenders per store through the third quarter. That's up from an average of only seven in the third quarter of 2009 but still below an average of 10 per dealership in the first quarter of 2008. That includes all lenders, not just subprime.
NEXT WEEK: FIVE F&I TRENDS TO WATCH FOR IN 2013
2. Thinner interest-rate margins. More competition among lenders inevitably will force them to cut rates and try to make it up on volume.
What happened: More players and more competition naturally breed thinner margins.
Jim Landy, CEO of CarFinance Capital, said at an F&I conference in October that growing competition is already squeezing margins in subprime auto loans.
"The times of above-average margins are probably behind us," he said.
Landy and executives from other lenders said they are willing to sacrifice some margin, but they said competition is still "rational." That is, they said no one seems to be lowering their approval standards or losing money outright just to chase volume.
3. Greater volume. Increasing credit availability, the possibility of lower prices, and recovering household finances should produce higher unit volume.
What happened: Through 11 months, auto sales were up about 14 percent from the year-ago period, to about 13.1 million, according to the Automotive News Data Center.
Naturally, that greater volume generates more loans and leases, along with more trade-ins and thus more used-car sales.
A year ago, J.D. Power and Associates expected U.S. light-vehicle sales of about 13.8 million, up about 9 percent from 2011. The research firm said in a Dec. 20 forecast it now expects 2012 U.S. light-vehicle sales of 14.5 million, about 13 percent ahead of 2011.
4. Greater emphasis on aftermarket products. Potentially thinner per-unit margins on financing will mean more emphasis than ever on F&I product sales at dealerships.
What happened: Like a year ago, many dealerships continue to pitch "100 percent of their F&I products, to 100 percent of their customers, 100 percent of the time."
Most of the publicly traded new-car dealership groups have shown increases in F&I revenue per unit in 2012.
Some dealers at F&I conferences in 2012 said they were looking for sales of F&I products to make up for lower profits from dealer reserve, the dealership's cut of the customers' final interest rate.
At least in part, that concern stems from a belief that the federal Consumer Financial Protection Bureau could set limits on dealer reserve.
"I see the train coming," said Tyler Corder, CEO of the Findlay Automotive Group in Henderson, Nev., at a conference in October.
5. New regulation. Assuming the Consumer Financial Protection Bureau gets its act in gear, it could generate new requirements for dealerships, even though most franchised dealerships are exempt from direct CFPB supervision.
What happened: The CFPB in 2012 remained more of a potential threat than an actual one.
There was a growing realization among dealers and dealer attorneys at F&I conferences this year that any regulations the CFPB comes up with for lenders immediately will affect dealerships, even though most dealerships are specifically exempted from the CFPB's jurisdiction. Only buy-here, pay-here lenders fall under CFPB authority.
Meanwhile, the CFPB took some actions this year in other sectors, such as credit cards, that could have an impact if applied to auto lending, too. For example, the CFPB fined credit card issuers for failing to adequately disclose that add-on products were optional.
It's easy to imagine the same thinking applied to a dealership's aftermarket F&I products.
But in terms of new rules specifically for auto lenders, 2012 was a bust for the CFPB.