Kicking The Tires On AutoBranch's Operation
Think you'd like to copy AutoBranch's success? The concept germinated at City County CU for 10 years-and then it took another five years to find the right location-but CCCU CEO Bill Marquardt and COO Lloyd Gill said they'd be happy to help other CUs interested in getting a similar branch started.
Here's a 14-point inspection of AutoBranch:
* During 2004 404 cars were sold, 280 to CCCU members, totaling about $4.5 million. The rest of the loans went to the 12 partnering CUs.
* Of those 280 cars, 38 were sold to people who just walked in off the street with no advertising and joined the credit union in order to buy a car there.
* The projected F&I income was $452 per car, but the actual amount realized was $589 per car.
* Instead of cannibalizing the CU's existing used car loan business, CCCU saw an increase of 45% in used car loans.
* The average yield on the loans 7.89%
* The average loan is $16,000.
* AutoBranch breaks even on 35 cars per month.
* Approximately 85% of buyers purchase extended warranties.
* Some 94% of all car buyers also bought GAP, Lo-Jack and other added products and services associated with car loans.
* CCCU is launching a "Friends and Family" program that offers a $50 gas card for referrals to AutoBranch. A similar program for community groups is also in the works.
* AutoBranch is hammering out a marketing agreement with BJ's Wholesale Club.
* AutoBranch is working to have a presence at local fairs, festivals and community events.
* An accessory catalog of options for vehicles is in the works, and the CU is also promoting a new car auto buying service.
* CCCU is looking to open other AutoBranch locations outside of the state.