Auto Loans Opportunity #1! But Credit Unions Need To Stop Thinking Like Car Dealers

In a recent Transunion survey of credit union executives, over 50% said that auto loans have the greatest potential for loan growth in the near future (second largest was mortgage lending with16%).

by. Roger Conant, CUTweetTrack

In the survey, those same executives said that competition from large banks and captive finance companies was the number one threat to auto lending growth.

So how are credit unions going to compete with those big lenders? Are they going to keep doing the same old thing, trying to battle it out at the point of sale…where everyone else is huddled?

Truth is that the big boys have it all over credit unions when it comes to point of sale…with their huge budgets, low rates and much stronger position with the dealers.

That’s because the car guys have only one strategy…throwing all of their weight at the time of sale.  Most of them don’t have a relationship bone in their DNA.  And they’ll always be better than credit unions at doing it.

So I’m suggesting that credit unions stop acting like car dealers.  Yes, that’s right, credit unions have geared all of their efforts to focus where everyone else is…at the end of the sales funnel.  Trying to be top of mind at the exact point when the member makes the decision to shop for a car.

Credit unions need to start thinking like credit unions when it comes to courting the potential car buyer…long term relationships.  That’s what credit unions purport to be experts at, isn’t it?

Here’s my point.  That long term relationship with a member, concerning their transportation needs, doesn’t start at the point of sale…it begins at the point of ownership!

And when it comes to supporting the member with care ownership, credit unions have been thinking just like the car guys…after they buy it’s on to the next!

To prove my point, just take a look at any CU AUTO CENTER.  Do you find one piece of information or resource aimed at helping the member with car care and repair?

Up to now, credit unions have missed the boat by focusing all of their marketing and relationship building efforts at the point of the car sale.

But it’s not as if the members have told them to focus there.  Filene Research recently uncovered the fact that 67% of member respondents said they would value help from their credit union in managing BOTH the car purchase and OWNERSHIP process. And in that same survey, 48% of members said they would value help from their CU in budgeting for and financing maintenance and major repairs.

Armed with that powerful information, credit union i3 alumni Betsy Sommers from Seasons FCU and myself are championing an effort Filene has just launched in partnership with RepairPal that is aimed at supporting members with car ownership. (check out the Filene pilot here)

RepairPal has spent years developing an easy to access, exclusive data base of fair price estimates for the top 135 car repairs.  In addition, they are also building a list of “top shops” members can trust (based on a heavy duty series of strict qualifications).

It’s an exclusive way for credit unions to arm the member with real world repair estimates before they ever go shopping for a car repair. And it will be especially helpful to women, who have a high perception of being taken advantage of when it comes to car care and repair.

It’s just the beginning of a “car ownership” program credit unions can implement to build long term relationships with member car owners…and eventually, member car buyers!