There are many options when it comes to automobile referral services, but Riverside County's Credit Union says its "Auto Expert" service is unique in the benefits the program provides for both its partner CUs and their members.
Riverside County's CU founded Auto Expert in 1998 and manages the service through its CUSO, Riverside Credit Union Service Organization. Jennifer Binkley, president of Auto Expert, told The Credit Union Journal RCCU had an auto delivery service prior to 1998, but management felt the level of service was insufficient.
In Auto Expert's first year of existence, it was offered exclusively to members of RCCU. In 1999, Service Plus CU, also headquartered in Riverside, along with Pasadena, Calif.-based L.A. Financial Credit Union became partner CUs in the service.
Auto Expert has expanded in 2003. Management felt the service has become "established," Binkley said, and it has made an effort to market the program to other credit unions. In addition to RCCU and the two original partners, the service currently is offered to members of three CUs in California- Inland Empire CU in Pomona, Victor Valley CU in Victorville and Norton Community CU in San Bernardino-plus First Resource FCU in Saint Joseph, Mich.
According to Binkley, Auto Expert is different from typical indirect lending programs because of all the personal touches it provides.
"We really strive to maintain loyalty and the relationship with the credit union at the branch level," she said. "The car is delivered to the credit union with a big red bow on the hood. With direct lending, the member may never come to the credit union. With dealer direct, the credit union sends its member to a dealer lot and has no control over the service or price the member receives."
"With Auto Expert, we keep control of the experience," Binkley continued. "The car is picked up at the branch, where the member can get financing and insurance. When someone is coming in to pick up his or her car, we already have started his or her loan paperwork. As a result, the process only takes about 30 minutes, compared to four hours at a dealer."
The partner credit unions do not pay fees to Auto Expert, nor do they own any part of the service. Auto Expert has relationships with 33 preferred dealers in California and 14 in Michigan. Binkley said the dealerships pay an undisclosed transaction fee to Auto Expert because the service generates volume for the dealers.
In addition, Auto Expert pays partner credit unions for referrals.
"If the referral comes from Riverside County's Credit Union, we give the bonus directly to the employee who refers a member. We try to encourage the partner credit unions to do the same for their employees as an incentive," she said.
Members also benefit from the service because Auto Expert can negotiate discounts for most automobiles through the fleet departments at its preferred dealers. RCCU said the average savings from the manufacturer's suggested retail price is $1,776.43.
Auto Expert hosts special auto sales events four times per year. Binkley said sales have increased from an average of 65 per event in 2002 to 98 this year, but added that is not the criteria the service uses to measure its success.
"The most important score is the member satisfaction score and the number of loans funded, more so than the number of sales," she said. "Our current member satisfaction score is 97.4%. With zero-percent financing at dealers, credit unions have seen an erosion in auto loans. With Auto Expert, our partner credit unions get more loans."
The average loan volume generated by each of the four sales events in 2002 was $1,054,000. That figure has increased to $1,480,000 for the three sales held so far this year. Total loan volume generated by Auto Expert for all partner credit unions was $30.4 million last year. Through June 2003, Auto Expert already has generated $21.3 million in loans.
