Auto leasing popularity on Long Island brings members into showrooms
Hauppauge, New York (June 9, 2017)—GrooveCar’s auto leasing program for credit unions, CU Xpress Lease, has announced year-to-date volume is up 39% in Q1 2017 over Q1 2016. In total, CU Xpress Lease funded nearly $1 billion in lease volume for 2016. The year is off to a great start, and credit unions report strong growth in attracting deposits and loans. Q1 2017 will break records for credit unions according to Callahan & Associates, experiencing the fastest 12-month share growth rate in 14 years and the 3rd year of double-digit growth. Credit unions nationally witnessed new and used auto loan portfolio growth up by 34.6% over 2016.
A GrooveCar partner, Teachers Federal Credit Union, headquartered on Long Island with assets of $5 billion, is exceeding the national trend, reporting lease volumes have increased significantly in the last year. In 2016, auto lease volumes were up by 33% versus 2015 numbers, in 2017 Q1 volume is up 85%. The success, according to Teachers, is driven by lower money factor rates coupled with competitive residual values. “Long Island credit unions are making an impact and are now taking business away from captive lenders and banks. This is a profit changer. CU Xpress Lease offers credit unions a means to be competitive at all stages of the auto buying process,” remarks Frank Rinaudo, Senior Vice President of GrooveCar’s CU Xpress Lease.
Regional growth for the program is attributed to continued popularity of leasing versus traditional financing. The program continues to drive loan volume for credit unions and increased sales for Long Island auto dealerships where 90% of the franchised dealerships participate in the GrooveCar program. “We are thrilled to provide a leasing solution where credit unions and our preferred dealers, here on Long Island, can do some serious business together,” explains Rinaudo. Francis Collins, Senior Vice President, Credit, Teachers Federal Credit Union, located in Hauppauge, agrees, “The leasing program has been a main driver behind our significant auto loan growth in 2016 and now into 2017. Members are benefiting from the program through low rates and great service at origination and lease termination.”
The CU Xpress Lease program provides a solution for credit unions and their members to participate in leasing on Long Island. Providing a program for consumers allows credit unions and dealerships to do more business together given nearly 70 percent of all new vehicles sold are through the lease channel. Robert Kravetz, General Sales Manager for Huntington Jeep Chrysler Dodge, located on Long Island reports at his dealership the number of leases is actually higher, “We are seeing 75-85% of our business through leasing. Of that number, 70% of all leases are going through credit unions because the programs work well for the consumer and the dealership.”
The Long Island market offers perfect demographics for auto lease growth. There is a strong employment market for a range of age groups who prefer this method of financing. “We are seeing members of all ages partaking in leasing, many of whom are taking out their second and third lease with TFCU,” adds Collins. Auto leasing relies on residual values of the vehicle; predicting what the car is going to be worth at the termination of the lease. “Offering low mileage leases, the CUXL program provides flexible mileage options as low as 7500 miles a year, this keeps the values high,” Rinaudo further explains, “The combination of the two allows us to provide great lease specials through the credit unions for area dealerships to attract customers. It’s a great situation for both parties.”
In addition to Long Island, GrooveCar’s CU Xpress Lease is a national program that serves credit unions throughout the nation, with sales representatives and support staff to assist credit unions in managing all aspects of the program. The program has been in operation for over a decade with many lease cycles that have made credit unions on the program 100 percent whole when each cycle ends.
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