MANCHESTER, N.H.-A unique, internally created loan program is creating a symbiotic relationship between independent auto dealers and one credit union here with all sides, especially car-buyers, coming out as winners.
In 2004, Barbara Lussier, VP-Lending at Bellwether Credit Union, crafted a program that increased the amount of auto loan business the credit union was doing while allowing the institution to retain all control over the transactions. This hybrid of direct and indirect lending is aimed exclusively for independent used car dealers throughout the Granite State-but only those with exceptional histories.
"What we do is we look for independents that have been in business for at least five years; we handpick them out of the state," Lussier pointed out. "It was very important to choose the right independents because independents come and go out of the business; there's a lot of risk there. You have to make sure they are very reputable compan(ies)."
Bellwether retains all of the paper on the loans; dealerships simply close on behalf of the credit union. Franchise dealerships shy away from such relationships, Lussier maintained, because they don't like the fact that Bellwether creates and hangs on to all of the docs. Though the CU has now joined CUDL to reach out to those franchises, it still does upwards of $1 million worth of business through its homegrown program.
The $296-million institution has not spent a dime on advertising or had to make a concerted calling effort to increase business for its internally developed program; all of the dealerships the CU works with have been referred by other dealers, many by the man with whom Lussier first worked.
Stan Anthony owns Stan's Service Center in North Conway - a little place with two garages and a small lot full of cars on a lot that used to house a pair of gas pumps. He credits Bellwether for providing financing on nearly half of all the cars he sells annually.
"I'm just a small dealer, I sell about 120 cars a year," Anthony noted. "Having financing available at unbelievable rates really makes it great for my customers. As long as the customer has good credit I've had no problems at all."
Pattern Is Repeated
That pattern is repeated for dozens of dealers across the state and Lussier believes that Bellwether's program fits a niche for these independent dealers, especially because of the way it prices loans. "(Members) get the best rate based on their credit score and not whether it's a used or new vehicle," she said. That's why used car dealerships love us."
Anthony, who has been in business since 1972, backs up Lussier's theory. "You could have a 4- or 5-year-old car and they'll give you reasonable rates as long as your credit is good," he said, noting that many of the cars he sells fits in that range. "Bellwether has been very good about using a person's credit score and credit history."
Thirty-six or 48-month loans start at 4.94% for members with excellent credit history - the value of the vehicles they purchase do not factor in to the rate decisioning. Bellwether is tightening some of its lending practices a bit as the economic slowdown takes hold, but Lussier has no concern that the independent auto dealers she works with will become a liability at all.
"In the three years I've had only one loan that was misrepresented to us and the dealer bought it back right away; there were no questions," she said. "The independents we deal with have the same philosophy as the credit unions do 90% of them are family owned and operated. When you walk in the door it's usually the owner that sells the car to the (customer)."
