ONTARIO, Calif.-Credit Union Direct Lending (CUDL) is predicting a stronger new car sales market in 2012, but says credit unions will have to fight even harder for their loan share.
"The sales will be there but the market will be even more competitive," offered Joe Greenwald, VP of marketing. "This year credit unions need to do whatever they can to own that member relationship up front-whether that is putting auto shopping on their website, doing preapprovals ..."
CUDL is beginning to see a positive "bounce" in the new car market, citing the latest numbers. "The U.S. will finish at around 12.7 million new car sales this year, and the seasonally adjusted rate for this month is around 13.7 million," Greenwald said last month. "All indications are we will continue to see growth."
Greenwald acknowledged that credit unions have become much more competitive on rate, but declined to cite where CUs need to set their offers due to varying market conditions. Credit Union Journal reports during the second half of 2011 showed a number of CUs drooping below 2% for new cars and prime credit.
Yet what Greenwald contended will make the biggest impact this year is CUs getting in the trenches and "doing everything they can to compete." According to Greenwald that means building and keeping strong relationships with car dealerships and providing methods to make it easy for the dealer to work with the credit union-such as the dealer being able to pull down a loan online without having to submit an app.
Static Pool Analysis
It also means better analytics. "We offer Lending Insights, but whatever the tool, the credit union has to be doing static pool analysis and understanding their different internal and external market segments," Greenwald insisted. "If you can price someone more competitively because their risk profile is lower it gives you the chance to get that loan rather than seeing it go somewhere else."
What make back down, agreed Greenwald, are used car prices. But he did not agree with many experts who told Credit Union Journal used prices will fall sharply this year (see related
Greenwald agreed that credit unions need to be more careful with used loan to values. "But if you are making good loans you will not have a high number of repossessions and that softens the LTV issue."
