HAUPPAUGE, N.Y.—Credit unions offering leasing programs should expect to compete on more vehicles in 2018, according to a forecast from GrooveCar.
In a Q&A with CUToday.info, SVP Frank Rinaudo outlined what he sees ahead for leasing, as well as the company, in 2018.
CUToday.info: Looking at 2018, what will be the primary focus of your client credit unions?
Rinaudo: 2018 is going to be a very good year for credit unions and their ability to provide leasing on a wider range of vehicles that have previously not been available. As market conditions are now more favorable, we anticipate those who have been on our CU Xpress Lease program will see increased growth, and those joining the program will watch their new vehicle auto portfolios grow with this product. Our forecasts are showing there will be many more prospects for CUs as manufacturers are supporting less vehicles through a lease program as they once were. This allows credit unions the ability to compete on a wider variety of vehicles that once was not possible. Credit unions will be more competitive without taking on additional unnecessary risk
CUToday.info: How is this different from 2017 or if the focus is similar, how has your—and your CU partners’—strategy evolved?
Rinaudo: The market is wide open, this is a change from 2017, as credit union lease programs will be providing lease opportunities on vehicles never available before going into 2018. Select manufacturers have chosen not to offer competitive lease programs on all models. We welcome such opportunities and expect to compete on vehicles ignored by captive finance companies. Our business model is based on going where the opportunities are. Our management team at CU Xpress Lease has over 150 combined years of experience, with professionals who have worked in all aspects of the leasing business. We understand how to ensure our program and clients are positioned to take advantage of consumer trends in the leasing climate.
CUToday.info: What are the keys to your program?
Rinaudo: We are working with our credit unions and new partners to help them grow their portfolios. This includes providing them with knowledge-based solutions to get them up and running in a turnkey manner. CU Xpress Lease provides consulting programs, the support staff from marketing to field representatives that work directly with the dealerships. Our dealer relationship managers train and maintain strong dealer relationships while communicating with the CUs. The result allows a credit union to become a full-service lender and compete 100% of the time at the dealership where leasing represents in excess of 30% of auto sales nationwide and in some areas that number climbs to over 70%. A narrow market is hard for CUs to compete in, CU Xpress Lease closes the gap and opens market opportunities.
Credit unions are made whole at the end of the lease cycle. Fusion, our parent company, owns the asset, CU Xpress Lease calculates the residual value and the CU receives a check for the full residual value at the end of the lease cycle. This is the difference that sets us apart. Our program covers such costs as over mileage, wear and tear, termination fees and all other costs involved. There are some programs that make the credit union responsible for these costs. Having a solid program that supports the credit union’s desire to compete without risk, is why CU Xpress Lease financed nearly $1 billion in lease volume in 2016.
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