For Repos That Didn't Get Much Lovin', Firm Adds Online Category
TitleAuctions, a technology company that helps credit unions auction repossessed cars on the Internet, has added a new feature that it says credit unions can use to increase their return on "rough" inventory.
The new service is known as "Econo-Lot." It is designed for vehicles with imperfections that make them difficult to sell, ranging from high mileage to dents to missing parts.
Mark Coleman, president and CEO of TitleAuctions, told The Credit Union Journal the company works with 24 credit unions in seven states, and reaches more than 500,000 CU members through its network.
"Earlier this year, four credit unions came to us asking if we could create a category in the software tools to allow them to post their rougher repos," said Coleman. "They were sending these cars to auctions, but were getting just a fraction of wholesale. The cars were being bought by salvage dealers, who would fix them up and sell them at a nice profit. Our credit union clients wanted to be able to sell these vehicles directly to their members."
In the first week of February, TitleAuctions sent an e-mail to the credit unions using its service, informing them Econo-Lot was ready for business. Within one day, the first posting of a rough repo appeared. Coleman said the vehicle had nearly 180,000 miles on its odometer, fading paint and door trim that was beginning to slide down. Yet, with all its imperfections, it received its first bid in just 48 hours, he reported.
Customized Web Page
TitleAuctions was founded in October 2002, and launched its service in March 2003. The Credit Union Association of Oregon invested seed money in the company and helped supply contacts at several CUs.
Each credit union can customize its own TitleAuctions web page. The auction page can be incorporated into a CU's website, or the credit union can link to the company's national auction page: cuauctions.com. Both members and non-members can purchase a repossessed vehicle through TitleAuctions. Buyers eligible to join one of the company's credit union clients are given the opportunity of doing so.
The company helped credit unions sell 100 vehicles in 2003. Coleman said January was a banner month, with 34 automobiles sold.
"We continue to hear that clients are writing loans on about half of the repos they sell," he said. "And, anecdotally, they are picking up members through the service. Members see the cars on the auction page and tell their friends and family members about them."
The downside, said Coleman, is 20% of the CUs TitleAuctions works with are selling 80% of the vehicles. In general, the larger credit unions are more successful than smaller credit unions.
He said in mid-March the company began training credit unions on how to better use online auctions to sell repos.
TitleAuctions serves 10 CUs in Oregon: Clackamas Community CU, Oregon City; Mid-Oregon Credit Union, Bend; Northwest Community CU in Springfield; Oregon Pioneer FCU in Milwaukie; Pacific Crest FCU, Klamath Falls; Safeway Northwest CU in Clackamas; Schools Plus Credit Union, Pendleton; Southern Oregon FCU in Grants Pass; and Portland Postal Employees and Cascade View Community CU in Portland.
The company has six credit union clients in the state of Washington: Columbia Community CU and City Employees of Clark County CU, both based in Vancouver; America's Credit Union, Fort Lewis; O Bee CU, Tumwater; Simpson Community CU, Shelton; and Spokane Teachers CU in Liberty Lake.
Montana, Texas and Utah are represented by two credit unions each. In Montana: Elkhorn CU in Ft. Harrison, and Helena Community CU in Helena. In Texas: H-E-B FCU in San Antonio, and Texas Crossroads CU, Victoria. In Utah: Tooele FCU, Tooele, and Transwest CU, based in Salt Lake City.
Clients in other states are Member One FCU, Roanoke, Va., and Saugus FCU, Saugus, Mass.
Coleman said TitleAuctions expects to add a credit union in an eighth state soon.