LAS VEGAS-How can credit unions increase their auto lending? Neil Goldman, senior partner at Goldman Consulting & Strategy, Del Aire, Calif., offered these tips during the CU Direct Lending Conference here:
* Credit unions must create relationships with auto dealers, because 91% of buyers fill out paperwork at the dealer. "I do not see that changing any time soon," he said.
* CUs offer first-time home buyer workshops, with success, and therefore should consider first-time car buyer workshops.
* Establishing a human connection is vital. People appreciate getting advice not only about auto loans, but also helping to solve other issues via solutions such as loan consolidation.
* Once a CU helps one person, it often gets family members and friends to join and take out loans as a result.
* CUs must have a focus and have a distinction. "USAA has had tremendous success by emphasizing building relationships."
* CUs need to offer expedited paperwork processing, support in steps of the buying process, skip-a-pay programs and education.
* Partner with dealerships on special car sales.
* Not being open is a challenge. Memorial Day is one of the hottest days for car buying, but almost all CUs are closed that day.
* Payment and rates rule, especially with non-members. Despite strong relationships with their CU, most members are still only basis points away from financing elsewhere.
* Unless the CU creates a compelling value-add beyond payment and rate, then the CU is just a commodity and low price will always win.
More Tips
* CUs need to offer convenience, as in speed and ease, one-stop shopping, and access at closing.
* Consider offering an auto-buyer service-often the most under-utilized part of the CU. "Most members are unaware of its existence, or are not sure exactly what is offered," he said. "If they do know their credit union offers the service, some worry about cost or it taking away 'fun.' "
* If CUs segment the auto-buying and/or financing process, give consumers the opportunity to use some or all of the process, including finding a car, setting up a no-sales test drive, and price negotiation assistance.
* Most interest is in negotiating price. More consumers express an interest in getting help finding used cars than new cars.
* To converting indirect members, CUs need to offer checking accounts, loan consolidation, credit cards, ancillary products, financial reviews, and other package offers.
* Practice proactive personalization. "Help people without selling them. Be altruistic and offer problem solving," he said.
