A new year gives all of us — providers, administrators, agents and dealers — a chance to refocus efforts to keep growth up and your competitive advantage sharp. 2018 will be a continuation of many elements we have all grown accustomed to in the past, as well as new aspects we need to pay attention to moving forward, including:

• Continued economic growth under deregulation and reduced taxes

• Continued rising interest rates

• Continued rising new-vehicle prices

• Increase in off-lease used vehicles entering the market

• Downward pressure on used-vehicle pricing due to increased supply

• Continued payment sensitivity and push for longer loan terms

• Continued negative equity growth in auto loans

• Continued demand for customer satisfaction, e.g. smaller/easier payments and more digital/at-home shopping experiences

All of the above factors have experts predicting a 2.5% decrease in total sales volume. In 2017, 17.2 million new cars were purchased. Experts are projecting 16.7 million new-car sales in 2018. Used-car sales are expected to grow slightly as a record number of off-lease vehicles will enter the market. Experts are predicting 40 million used cars will be sold in 2018, including 15.3 million via franchised automotive dealers. Despite the prediction for a slight decline in new-vehicle sales, we are still at all-time historic highs for total sales volume.

Overall, demand for new and used vehicles will be high as the economy continues to grow and interest rates remain historically low. Americans have more cash as a result of reduced taxes and higher wages, and consumers are more optimistic. Our opportunities in 2018 will not be limited by overall sales volume.

The one thing we can all be certain of is that the vast majority of customers will remain payment-sensitive. The average monthly payment for a new car is almost $520. That’s $260 per payday for the majority of Americans who get paid every two weeks or $130 per week for buyers who get paid weekly.

Also, a record high 33% of all buyers have negative equity in their trades. The average negative equity in those trades grew to over $5,200 last year. Dealers who focus on making the buying process easy and offer affordable payments while helping buyers reduce negative equity will have a competitive advantage in 2018.

To have a great 2018, we need to take advantage of a growing economy and a less oppressive regulatory environment. We must embrace change and look for opportunities to better serve dealers, agents and car buyers. Much can be accomplished with small changes in the products, services and processes utilized by dealers.

Growth and competitive advantage in 2018 will be achieved by better understanding and satisfying customer demands and needs. Providers, administrators, agents and dealers who best meet customer demands by embracing customer-centric products, services and processes will win.