What better place to think of a new auto loan program than in your own car?
Envision Credit Union CEO Ray E. Cromer, Jr. said he was mulling over different ways to promote fuel efficiency and also boost vehicle purchasing. Media reports on the increasing cost of gas and higher sales of hybrid cars and SUVs are published virtually every day and were also on Cromer's mind as he drove to the office one day.
"It just popped into my head," he said.
Cromer pitched the idea to his staff who created Envision's "Go Green, Save Green" loan product that reduces the vehicle owner's annual percentage rate (APR) by 1%. During a 36-month obligation, drivers will save close to $700 on a $20,000 loan.
Drivers will qualify for the new "Green Rate" when they agree to buy a vehicle with mileage of 30 miles per gallon or higher. Cromer said the loan's final APR is determined by the member's credit score, so the campaign doesn't exclude anyone in the credit union.
"Everyone can play and get the benefit," he said. Cromer said another reason to create the new loan is the rising competition from automakers, some of whom have re-launched 0% loans to entice buyers. Cromer said the loan program is too new to quote data or determine what a typical member is like, but the dollar savings should equate to roughly a year's worth of gasoline.
The new product reeled in six members for "Go Green" loans in a week and a half, Cromer said. Members will have to wait for their fuel-efficient vehicles as high demand nationwide has created a backlog of orders for vehicles such as the popular Toyota Prius or the Honda Civic Hybrid.
To market the "Go Green" loans, Cromer said ECU turned to a simple, familiar and effective tool: coupons. The dated coupons were sent in newsletters and member statements. "We've heard a lot of nice comments about it so far. People love coupons," he said with a laugh. "It's a fairly simple thing to create a coupon."
Members bring the coupon in to make a deal and credit union staff simply staple it to the loan application. Cromer said the "Go Green" campaign required no changes or added costs to the Envision CU loan process.
"It works pretty cleanly. It's pretty easy," he said.
Cromer said Envision's use of dated coupons is easy and inexpensive for a credit union to duplicate. Cromer said the current "Go Green" coupons are dated to end in October just after the new car models hit the streets.
Envision CU serves 33,500 members with $190 million in assets.
