For the last year or more we've been seeing article after article stating that the ONLY THING that is holding CU auto lending up is USED CAR LOANS. And yet, most every CU "auto center" I see still focused on NEW! Here's the latest just today from this CUTimes piece. To quote from the article..."A 9.4% decline in new vehicle loans was offset by a 6.1% increase in used vehicle loans".
While some might think that 1) the extended length of car ownership, 2) new car buyer shift to used and 3) Gen Y indifference to the car culture is strictly due to the recession, I'm not so sure these changes are temporary. And even if the shift is temporary, most economists predict the current move to austerity will last for at least a couple more years. Either way, the current economic climate has caused members to look much closer at their transportation needs and habits.
And yet, the majority of credit unions continue to display the same old content on their "Auto Centers"... content that is still geared to "car sales", while ignoring the fact that the days of accelerating "new car" CU loan share are long gone. Every expert in the business is telling CUs to focus on "used car" lending. And the evidence is overwhelming that Gen Y is not, as a group, consumed with NEW cars. They will look at transportation more as a "commodity".
Here are a couple of suggestions of ways to bring the Credit Union Auto Center up to date:
1. Start focusing on used cars! And I don't mean placement of a "used car" configurator that leaves your members at the mercy of a dealer used car pro (pro, as in "sales pro"). And get some new, edgy auto resources. Replace the old CU standard NADA Guides (dealer skewed) with sites like Member Auto Center an exclusive CU auto center micro-site thats affordable and features special Pre-Owned inventory from pre-approved, member dealers. I can personally guarantee this program...I helped manage this program for three years.
2. Car Care and Repair resources--Members are just as challenged with maintaining and repairing their vehicles as they are in dealing with dealers. And the fact that members are keeping their cars longer means they will opt more and more to make major car repairs, rather than take on a car loan (either new or used). It also means that there will be more focus on vehicle maintenance. I only found one credit union that posted "car repair" content on their site. As I mentioned in my first post on this subject, why can't there be a CarCare and Repair network of providers to match what many CUs have for dealers.
3. Car Care and Repair Discounts-- There seems to be a wave of companies offering credit union member discounts on everything from tax preparation to flowers. But I've only found one company offering discounts on car care and repair services. myEZCarCare offers credit unions the chance to provide solid discounts on vehicle maintenance, tires and car repair with such nationally known providers as PepBoys, NTB (National Tire & Battery), jiffylube and many others...for only $10 per car loan. And they make it easy to implement with no contracts or minimums. The discount card also offers rental car and hotel discounts. What an inexpensive way for CUs to provide "value" for their member car owners!
So there you have it. Credit Unions have a golden opportunity to be first movers with respect to providing "everything auto" (resources and education) for their members. But they're going to have expand their current "auto centers". We're not talking about a big investment here...just a way of adapting to the changing auto ownership environment.
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