GrooveCar’s national car leasing program for credit unions hits milestone
Hauppauge, New York (November 4, 2016)—CU Xpress Lease, the leading automotive leasing program for credit unions, is celebrating its 10-year Anniversary. In July, the program celebrated a financial milestone reporting it was up 40 percent over year-to-date 2015 and is on pace to fund close to $1 billion by the close of 2016. First introduced by GrooveCar in 2006, the program provides a seamless process to capture auto loan volume through leasing. Credit unions remark how it fits the needs of members, especially millennials, looking to get into a vehicle that may have been out of reach through a conventional loan structure. “In some regions of the U.S., leasing accounts for up to 70% of new vehicle purchases. This allows credit unions to be competitive 100% of the time, at the point-of-sale. The program provides all the tools needed to compete against captives and banks,” states Frank Rinaudo, Senior Vice President of GrooveCar, Hauppauge, NY. As CU Xpress Lease celebrates its decade-long service, Rinaudo credits the success of the program on the benefits it provides, without the risks once associated with leasing.
CU Xpress Lease has provided a way for credit unions to enter the highly profitable and exclusive lease market. Members want value for their hard-earned money, leasing will get them into a vehicle they might not otherwise be able to afford through traditional financing. The average car payment on a leased vehicle is $412, compared to $479 with a traditional loan. Offering a lease option meets with members’ needs and financial preferences.
The program is attractive to credit unions because it manages the disposition of vehicles at lease maturity, is 100% responsible for vehicles’ residual value and any wear and tear, along with an average FICO score of 757, a 75% look-to-book and an average term of 37 months. Credit union partners remark that members benefit as well through flexible lease payments, terms and mileage allowances along with access to lease specials on high quality vehicles. “We are thrilled to reach this milestone. However, we are always looking towards the future, planning for continued growth we can bring to our partners. This is accomplished through analyzing trends affecting lease market penetration, consumer spending patterns and future demand,” says Rinaudo.
Unlike other credit union automotive lease products, CU Xpress Lease assumes 100% of the residual risk. When vehicles come off lease, over-mileage charges are covered as are off lease damage fees, and termination fees. Nothing is deducted from the amount the credit union is paid. In addition, credit unions on the program benefit from having a dealer base developed in each lease market served by a CU Xpress Lease regional manager. Program managers service all aspects of the program for the credit union. This includes bringing dealers onto the program, training, maintaining relationships and other support services for the credit union.
The CU Xpress Lease program has grown to become the nation’s number one credit union automotive lease program featuring a portfolio of over $3.2 billion and more than 65,000 vehicles. The program provides credit unions with the ability to tap into incremental growth with a suite of services. According to Francis Collins, Senior Vice President, Credit, Teachers FCU, Hauppauge, NY, “Our partnership with CU Xpress Lease has enabled Teachers to grow not only its indirect channel but also its loan portfolio in a significant way. Lease volumes have increased over 200% in the last 6 years with the program. CU Xpress Lease is one of the main drivers of net loan growth at Teachers.”
The demand for leasing has skyrocketed, out pacing traditional loan structures in many areas of the U.S. As vehicle sales rise, the penetration rates for leasing are at its highest level, in 2015 lease originations accounted for nearly 4 million units. Credit unions continue to carve out a niche in this marketplace. “CU Xpress Lease provided a program to meet the growing needs of our members who prefer leasing over traditional loan financing. This has allowed us to stay competitive at the point of sale with our preferred dealers. As a result, what started out as a niche area of new business is now a highly valued auto loan business generator with substantial growth, year-over-year,” states Christopher Penna, COO, Nassau Financial FCU, Westbury, NY.
CU Xpress Lease is also hosting a webinar series on leasing, on November 10th. Credit unions interested in learning more about the CU Xpress Lease process and how the program can capture more loan growth, can sign up anytime on the GrooveCarInc.com website or by following the link: http://www.anymeeting.com/PIID=EC58DE80824A3C . Covered in the webinar: Why consumers are leasing, lease statistics and market data, benefits, risks and what makes this program a success for credit unions.