GrooveCar’s leasing product for credit unions expands service
HAUPPAUGE, NY (December 11, 2015) — Auto sales are booming in California with new vehicle registrations in the state topping 1 million during the first half of 2015, nearly a 12% gain over the same period in 2014. Helped by a resurgence of U.S. automakers, sales are expected to reach 2 million by years end, making it the best year since 2006. The favorable sales trend is expected to continue through 2016. With the combination of attractive lease deals, improved fuel, attractive technology and low interest rates, credit unions are looking to attract and service members during this highly profitable time. “CU Xpress Lease, a GrooveCar product, has expanded into the top lease market in the country. Having already mastered the northeast region, we are excited to bring our highly profitable product into another lease market,” stated Robert O’Hara, Vice President of Strategic Alliances, CU Xpress Lease.
With lease share of new-vehicle volume hitting new records in the third quarter, according to Experian Automotive, borrowers will continue to rely on leasing and longer loan terms to off-set higher loan amounts. Leasing accounted for nearly 27 percent of all new vehicle volume in the third quarter nationwide, a slight increase over the second quarter. Overall leasing has been on the rise since 2009. CU Xpress Lease is the nation’s leading credit union lease program, featuring a portfolio in excess of $2 billion and more than 50,000 vehicles leased. “Our program provides incremental loan growth and increased efficiency along with 757 average FICO scores, 80% look-to-book ratios with terms averaging 37 months,” explains O’Hara.
“Southern California is one of the top 10 auto lease markets in the country. Therefore, we knew we had an opportunity to better serve members by expanding our portfolio to include an auto leasing program. Enhancing our services to better serve members in this niche market aligns with our mission to Build Better Lives through World-Class Service and Convenience,” states Tom Orman, Senior Vice President, Lending, Credit Union of Southern California.
In select markets, up to 60% of the new vehicle market is represented by leased automobiles. In LA County for the month of September 2015, Experian reported 27,000 leases were funded and in Orange County, 8,000 were funded. The lease product by CU Xpress Lease is specifically designed for credit unions, allowing credit unions to reap the benefits of leasing while maintaining control of the credit process. “Our program eliminates the residual risk that had until been associated with leasing. Leasing has existed for decades with cycles of great success. The key is to capture elements that had made it a success, in a product that provides tremendous opportunity without the risk to the credit union,” added O’Hara.
Credit union members benefit through flexible payment options and lease terms, mileage allowances, GAP insurance and a “no surprises” wear and tear policy. CU Xpress Lease manages the disposition of vehicles at lease maturity, and are 100% responsible for the vehicles’ residual value and any excess wear and tear. Trending analysis regarding lease market penetration along with consumer spending patterns is a strong indicator that leasing will be in demand and poised for continued growth. “After a long period of vetting different vendors we made the decision to partner with CU Xpress Lease as they provided us with the best opportunity to capture significant volume in our market while mitigating the risk associated with leasing,” explained Orman.
As cited in: