DETROIT — While other factors are also contributing, two months into the Invest in America program credit unions' share of the auto lending market has risen to more than 20%.
General Motors, meanwhile, is expressing a greater interest in the long-term viability of the credit union-led auto buying and financing program.
To date, Invest in America has led to the sale and financing of 57,000 GM and Chrysler products. The result is credit union marketshare of auto loans is up six percentage points from the 14% share in March of 2009.
"We can't say how much of that is due to Invest in America, but we know we are playing a role," said David Adams, president of the Michigan league, which developed the now national Invest in America program.
Mark Degnan, GM director of local advertising and marketing, said Invest in America is doing more than filling a credit void created by the retreat of banks and manufacturer financing.
"Credit unions have added credit capacity to the market, which has been a big help. But the second thing we've seen is that credit unions have a very loyal customer base. And by credit unions focusing on GM and Chrysler car sales, we've gained many new customers."
Degnan said that 66% of its Invest in America sales are from first-time GM buyers or those who left GM and have come back.
The Michigan league's Adams insisted that Invest in America would not be "having the impact we are seeing if all credit unions were doing was providing financing for deals that were previously provided by the captives and banks. So it's not just about credit union financing. It's about credit unions promoting the benefits of GM and Chrysler automobiles."
Of the 57,000 car sales in January and February, 80% have been financed by credit unions. The sales equal $1.4 billion and an estimated $1.1 billion in credit union auto loans. GM and Chrysler moved 31,916 cars in February.
What has likely helped drive the program's sales are marketing efforts of some of the largest credit unions in the country, observed Adams. Navy Federal Credit Union in Norfolk, Va., recently announced that it had $3.5 billion available for Invest in America loans. ENT FCU in Colorado Springs, Colo., Suncoast Schools FCU in Tampa, The Golden 1 in Sacramento, Calif., and State Employees CU in Raleigh, N.C., have also been promoting Invest in America, Adams said.
CU Growth Solutions, the marketing arm of CUcorp, has develop two TV commercials and two radio spots that are currently running in Michigan and are also available for the 1,000 credit unions that are involved in Invest in America. Adams said a comprehensive viral e-marketing campaign is also underway.
