"What one challenge do you think will impact auto finance and F&I product sales the most in 2023?"
Eddie Green, founder of Lot2You Finance, an Austin, Texas, subprime lender and digital retail marketplace for lenders, customers and dealers: "On the auto finance side, of course the interest rates have gone up. In regards to the products, we have a problem with the chargebacks, with the cancellations."
Loren Love, lead underwriter, Wells Fargo Preferred Capital: "I think the inflationary environment right now that we're in is causing affordability issues for the consumer. And so I think the auto finance terms will have to be a little bit more aggressive, a little bit longer term, a little bit higher payment than historically. On the F&I sales, it's going to be more difficult to work within that affordability to be able to sell some of those F&I products and include those in the financing. Because the consumer is already stretched almost to the limit with just purchasing the vehicle. And to layer on the F&I products is just going to be that much more difficult."
Frank McKenna, co-founder and chief fraud strategist for artificial intelligence and data provider Point Predictive Inc.: "The challenge that I see for this year for auto lenders is really going to be about balancing fraud and risk in a rising risk environment, given that we're going to probably see a likely recession. It's going to put a lot of pressure on lenders to really focus in on quality loans. We know fraud is probably projected to be at its highest for the year that we've ever seen, just due to ... lots of productivity among perpetrators. But we expect that it's gonna be a real challenging year to kind of make that balance of good quality loans while not taking in any fraud."
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