Rick Kurtz, senior vice president, dealer services, for Protective Asset Protection, has been serving the automotive industry for the past 23 years. He’s seen a lot of ups and downs, but the last five years have been a particularly challenging time.

He noted that, for providers, there have been a lot of lessons to learn. “Through the years, the automotive market has yielded many lessons, some tougher than others, but all valuable. Stair-step incentives, relaxed lending practices, F&I pricing models based upon unsustainable trends, and irrational ‘lifetime’ product pricing and guarantees are potential pitfalls for those choosing to ignore the implications of similar actions over the past decades.”

One of those items to keep in mind is compliance. While it has always been a factor in both the F&I space and in dealerships in general, it has been ramped up, Kurtz noted. More legislation has been enacted to protect consumers, which has led to everyone in the cycle needing to be aware of the new rules and regulations, and what part they play in enforcing them. “Providers, agents and dealers have responded by leveraging new technology to standardize processes and ensure compliance with state and federal requirements. This ultimately benefits the consumer by ensuring that every consumer will understand the products being offered and be in a position to make an informed decision.”

Looking ahead, Kurtz doesn’t see this trend going anywhere anytime soon. In fact, he expects that the Consumer Finance Protection Bureau will continue to grow in both size and scope, and that compliance will remain a top concern for everyone in the industry. He sees it as potentially even limiting choice, in the long run, as more regulations and requirements force some providers out of the market, or inspire lenders or OEMs to offer competing products themselves. “In the next five years, I would not be surprised to see OEM’s and major lenders exert pressure on dealers to sell factory or lender-branded products. Fewer options for dealers and consumers could be an unfortunate outcome for the market.”

Beyond compliance issues, Kurtz sees manufacturer-mandated facility improvements and the ability to attract and retain quality employees in the dealer space as prime concerns. It might be more on the dealer side of the equation, but he believes providers need to be aware of those challenges as well.

And providers, he noted have a part to play. He believes it is still a very rich industry with a lot of opportunities, for those who are willing to embrace it. “The auto retailing industry is a wealth of opportunity for anyone willing to work hard, network, and make the commitment to become a student of our business. This industry affords a vast variety of career paths including: dealership sales, dealership management, or more entrepreneurial options such as dealer, or general agent, plus corporate opportunities with OEM’s, lenders or a company like Protective.”