Inflation remains a significant consumer challenge, though demand may be on the rise.
The macroeconomic climate in the United States, as reflected in recent data from Experian’s Macro Economic Report, presents a complex narrative of resilience and caution. Retail spending, excluding motor vehicles, exhibited a noteworthy increase of 0.6% (SA) in August, signaling a potential rebound in consumer demand.
However, concerns surrounding high-interest rates and an impending economic slowdown have tempered the overall growth trajectory. Despite these challenges, the labor market has demonstrated robust performance, characterized by stable unemployment rates and significant job creation, contributing to a strengthening economic outlook.
So, despite a robust employment market, consumer challenges from housing, food, and fuel expenses have resulted in a 30-year high in subprime auto loan late payments and defaults.
The percentage of subprime auto borrowers at least 60 days past due on their loans rose to 6.11% in September — up from a previous high of 5.93% in January, according to the business news publication Bloomberg.
Experian’s Macro report gives economists hope for a soft landing for the economy after unprecedented interest rate hikes by the Federal Reserve. However, there are many hurdles for those providing financing to the credit-challenged. Incorporation of Advantage Automotive Analytics tracking devices to protect collateral with location and vehicle health data is the most cost-effective, strategic measure to protect finance portfolios.
By leveraging the advanced capabilities of the Advantage GPS device family, including wired Evo and wireless Revo, dealers can enhance their risk management strategies and ensure a more secure and efficient tracking of their financed vehicles. The real-time monitoring features offered by these devices allow dealers to proactively address potential defaults or delinquencies, contributing to the overall health and stability of their finance portfolios.
Inflation strains consumers’ ability to meet all of their financial obligations. Many consumers prioritize their auto loan as “must pay,” but defaults and late payments rise when housing and food enter the finance equation.
Experian notes that inflation has remained steady at 3.7% (y-o-y) in September, indicating a notable deceleration from its peak in November 2022. The report added that while the U.S. economy has shown marked signs of resilience, a mild slowdown in 2023 spilling into 2024 seems the most likely scenario, as high-interest rates and falling household savings weigh on consumers’ ability to spend.
Given Experian’s macroeconomic outlook, dealers should remain vigilant, protect their valuable collateral, and enhance the strength of their portfolio.
Advantage is here to help with both.The cost-effective and transparent fee structure of the Advantage family of GPS devices aligns with the current economic environment. Continuous protection provided by these devices, along with their resilient tracking capabilities, ensures that dealers can confidently navigate market uncertainties and safeguard their investments against potential losses.
Make no mistake: the current macroeconomic landscape is fraught with challenges and opportunities. The integration of Advantage GPS devices represents a strategic investment for dealers seeking to bolster their finance portfolios and enhance their risk management capabilities.
By leveraging the advanced features and benefits of GPS devices in alignment with prevailing economic trends, dealers can proactively navigate market uncertainties, ensuring the long-term sustainability and profitability of their business operations. Contact us to learn how Advantage can help you navigate this challenging economic landscape.
