Falling Credit Scores, Demographics Changing the Automarket

By Jeff Martin, President of Autoland Solutions

I have spent most of my career in lending, and not only are we seeing a marked shift in approaches to lending, we are also witnessing a shift in the population that is making car purchases. This year, car sales to buyers under age 55 have dropped by up to 38 percent, according to F&I Showroom Magazine*.

Historically, this segment presented meaningful finance opportunities, but it has been negatively impacted by the economic downturn, with the average credit score dropping by almost 50 points. At the same time, liquidity is at an all time high but underwriting remains conservative. These factors have led to significant competition from banks and auto manufacturers for the remaining prime and super prime borrowers.

So what do you do to offset the fact that, once again, credit unions face a David vs. Goliath scenario?

You get strategic. By leveraging your partnership with Autoland, you take the competition for the loan out of the picture.

For example, Mission Federal Credit Union in San Diego is a strategic partner, meaning that we are integral to their auto loan production. Together, through our alliance, we are generating great results. In fact, this past June and July, Autoland sales made up over 16 percent of auto purchase loan volume each of these months for Mission FCU.

How has Mission FCU achieved such success? In speaking with Sherry Carr, SVP of Consumer Lending, it comes down to the following best practices:

  • Autoland is a core lending delivery channel, figuring into the strategic planning and goals for the credit union. Mindset is important; 
  • Mission FCU promotes Autoland through all of its channels, and integrates it fully into their annual marketing calendar and business development efforts;
  • The two companies partner on custom marketing programs, including the annual all-staff incentive, “Day At The Races,” the “Autoland Car of the Month” promotion, and member incentive programs;
  • Autoland is integrated into the credit union’s internal referral platform, with referrals being visible to management, and the staff has established goals. Executives can see who is making referrals and can drive accountability as needed; and
  • Staff education is a key feature. Autoland is integrated into all new hire trainings and conducts ongoing staff events.

Indirect lending has ups and downs, but the direct loan channel has always been the consistent performer, and that’s still true today. If you need to increase loans, and want to do it with a strategic partner who understands your business, Autoland is the answer.

To find out how you can implement these best practices at your Credit Union, contact Marcia Francisco, Senior Vice President, Marketing/Business Development at 800.234.6999, x4427

 

Autoland helps credit unions drive loan revenue and deepen relationships by providing an unmatched auto buying experience to their members. From personal on-site consultants to turnkey marketing, your members will look to your credit union first when they need to find the perfect car and financing.

 

 

Questions? Contact Sales & Marketing Associate Craig Reed: 206.340.4789, creed@nwcua.org.

Posted in Marketing & Communications.