By: Robert O'Hara, VP Strategic Alliances, GrooveCar & CU Xpress Lease
Let’s look at 3 solid ways credit unions can jumpstart loan growth in 2017.
There’s been a great deal written about leasing, and it’s for a good reason: it works. In many parts of the U.S. leasing is the preferred method of getting into a vehicle, especially for the millennial member who is looking for savings and a technology rich vehicle to drive every 3 years. Leasing will help provide the finance option this generation is looking for. Statistically speaking leasing can make up 70 percent of all auto financing done at the dealership and nationally leasing accounts for a third of car financing. For credit unions to be a full-service provider, leasing needs to be part of the equation. This is not as difficult as it may appear; partnering provides solutions to staffing and expertise.
For a credit union that may be hesitant of getting into leasing, I assure you, in the right region of the U.S. you will reap the benefits. The devil is in the details and this is so very true with leasing. Years back credit unions engaged with the early lease programs were straddled with the risk, this is not the case now. The CU Xpress program which is part of GrooveCar, funded close to $1.0 billion in leases during 2016. Since launching our program a decade ago, all our credit unions have been paid whole 100% of the residual value that was used to determine the lease payment. Our program owns the residual risk, responsible for the wear and tear, all fees and additional over mileage. In other words, we do what we do best while you do what you do best, it’s a great partnership. Don’t overlook the opportunities this presents in 2017.
For more information on the CU Xpress Lease program please click this link: http://www.groovecarinc.com/cu-xpress-lease
- Preferred Dealer Networks
This is an area of tremendous long-term growth with very satisfying rewards. I want credit unions to take a hard look at who they are doing business with and where the loans are coming back to them. Having a working preferred dealer network requires communication, by both parties.
- Review dealers on the program
- Communicate with dealers on what you are doing to send members to them—your value proposition.
- Thin out the list and feature just dealers who will work with you
While there is some work ahead on the dealer network, once you have spent the time to communicate with your network on a regular basis, you will see increased volume. A link to a recent article I wrote delves into the topic in greater detail.
- Member Relationships
How is your credit union engaging with members? This is a great way to increase products-per-member ratios. The first step: Take a look at where conversations are happening. Are you penetrating all areas where members reach out to you and vice-versa? With every business relationship, there needs to be communication; use the many tools available to engage while getting your message across. When engaging ask yourself, are you selling to them or are you providing valuable information they need? This is extremely important because your millennial member is your largest auto buying member with the greatest potential.
Here are some thoughts when engaging this demographic:
- An auto purchase is a very big deal to a millennial—give them a car shopping experience along with pricing to meet their needs. As millennials enter the market to purchase a vehicle provide affordable options to get them there.
- Social media is a good way to communicate and provide the control they need to make decisions. Give them a reason to keep browsing what you have to offer.
- Provide guidance. Learning is a fundamental desire and is very helpful when provided during the car shopping phase. Provide the research tools they desire. This is a very mobile intuitive generation, make sure offerings can be viewed on this platform.
- Personalization is another important marketing trait to have. It’s all about being unique, and your credit union certainly fits this mold. In fact, credit unions are the preferred banking choice of millennials. Keep the conversation going with specific offers that meet their needs at this life stage.