When is an auto loan not about the loan? It’s no riddle, the answer is simple: When it's just about the car. Universally, members have a positive reaction to the car they are buying, and a negative reaction to the loan. Even if the rate is low and the terms are great, the thought of parting with money or getting into debt can be a painful one. However, when a member is wrapped up in the good feelings of buying their dream car, they feel more positive about going through the auto loan process. Therefore, if a member is fixated on price, it’s best to turn their attention elsewhere.
People in sales love to talk about price. They’ll compare one product to another on the basis of price. They’ll try to outsell the competition with claims of a lower up front cost or lower rate. However, all that talking about price actually focuses the buyer’s attention on it, even if they weren’t overly concerned with the cost at the beginning. At the start of a sale, it seems that the salesperson is a lot more concerned about price than the customer. Low rates and too much price undercutting can damage the credit union’s brand equity and make the credit union look desperate. This will cause members to develop low expectations and become disengaged.
The smart credit union works to dispel as much myth and notion about the loan as possible. Any way you slice it, focusing on price is an ineffective and debilitating move. Instead, maneuver members into a position where they fixing their attention on the fun highlights and features of their ideal car. Member are more likely to go forward with an auto loan if your credit union prioritizes this strategy
When real value is perceived by the buyer, the product or service being offered (in this case, an auto loan) becomes more desirable, and price or rate becomes less important. A good strategy is to pinpoint exactly what the member considers valuable, and adjust the pitch to meet that criteria. For example, suggest a vehicle that would fit their unique wants and needs.
It’s evident that if credit unions want to get more people signed up for auto financing, they should take a different approach to auto loan engagement by making the entire process about the car. The entire buying process should leave the member feeling good, secure, and confident about their purchase, and with positive feelings about the credit union that helped them reach their goals.