Lending

Get In Front of Members Early and Often

It’s important to have good working relationships with auto dealers.

November 05, 2013
/ PRINT / ShareShare / Text Size +
BobChildCLC.jpg
 
People consider buying a vehicle and borrowing money to do so as one event, making it crucial for credit unions to engage members early and often in the car-buying process.
 
That’s the word from Bob Child, chief of staff at CU Direct Corp., citing a study the company conducted earlier this year that examined consumers’ most recent car-buying experiences. He addressed the 19th annual CUNA Lending Council Conference in Phoenix.
 
“We need to get to consumers early and have better relationships with auto dealers to be successful in influencing their loan decisions,” Child says.
 
This will require providing information that helps consumers as they shop for vehicles, as well as making it easy to get loans on the spot.
 
Preapprovals are the key, for both the buyer’s and dealer’s convenience, according to Child.
 
He says auto sales growth rates have returned to normal: 9% for new vehicles and 4% for used vehicles in 2013.
 
And while some industry experts believe auto sales growth will fall next year to a respective 4% and 1% for new and used vehicles, Child cites a dealer group that believes auto sales growth in 2014 will mirror this year’s growth. 
 
“We’re excited about that,” Child says.
 
The nation’s aging fleet of vehicles is fueling sales growth, according to Child. The average age of vehicles on the road is 10.9 years.
 
“There are a lot of car buyers in this group,” he says.
 
Other factors affecting auto lending in the coming months:
  • More rationality in lending: Approval rates for subprime loans has dropped substantially, “which bodes well for the industry,” Child says.
     
  • Longer loan terms, driven by rising car prices. The average purchase price for vehicles financed through CU Direct is $30,500. “Even with low rates, the payment for that amount is still high,” he says. That will make auto loan terms of 72 months and longer more common.
     
  • Higher rates for subprime borrowers to compensate for thin margins on loans to prime borrowers.

See Credit Union Magazine's complete coverage of the CUNA Lending Council Conference.

Post a comment to this story

heroes

What's Popular

Popular Stories

Recent Discussion

Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

Your Say: Who should be Credit Union Magazine's 2014 CU Hero of the Year?

View Results Poll Archive