By Robert O’Hara, Vice President of Strategic Alliances. GrooveCar
The climate is favorable for credit unions to experience continued growth in their auto loan portfolios.
GrooveCar just made the announcement: “25 new credit union partners have joined the online auto buying program in Q3 this year.” We added up the numbers and that comes out to serving over 300,000 new members in the last quarter! Since this announcement, many more new partners have joined as the need to service members with an online resource is not an option credit unions can put off.
Let’s look at the numbers. The U.S. economy is expected to grow slowly but steadily in 2017 and 2018 (up to 2.5%). Strong demand in the household sector and an improvement in business investment spending will continue to stimulate growth the coming year. Credit union savings balances have been predicted to grow by almost 6% this year and is predicted to be at 5% next year. As the Federal Reserve continues to raise short-term interest rates, credit union members will remain cautious, yet optimistic, and seek higher returns on their savings. As a result, credit union loan balances will go up and are expected to rise 9% in 2018!
As the economy continues to expand over the next year, we should expect to see more consumption of automobiles, furniture and appliances. New auto loans, credit card loans and mortgage loans will remain areas for growth. Technological enhancements and new vehicles will continue to increase consumer demand for cars. This is all good news for credit unions.
As technology evolves, the way people shop changes as well. In a recent online survey, nearly 90% of consumers reported using the internet for pricing, ratings, and reviews of autos. The majority were found to likely, or extremely likely, to buy a car online in the future. The conclusion, consumers continue to seek out automotive ecommerce sites that provide the optimal buying experience. This will drive loan growth as the shift to purchase all things online, continues.
In our webinars, we witness the desire of our credit unions to tap into members’ buying habits and needs. Taking the first step is often the hardest, doing it together we can reach new heights. Let’s remember It’s not just about offering an auto buying service to members. It’s about providing an online experience complete with the next generation tools to make this a convenient and fun process.
I touched on this in the press release, without offering an auto buying service, credit unions risk missing out on auto loan growth opportunities. GrooveCar provides the strategies to engage members at all levels, plus lead generation tools lets your credit union know what is happening and when!
Still curious? Enjoy an online 15 minute demo when it’s convenient for you. Email me at: email@example.com or call Christine at: 631-454-7500 x137.
Follow this link to the article in CU Journal click here.