HAUPPAUGE, N.Y.-Amid the tragedy that surrounds so many lives and businesses in the Northeast, Hurricane Sandy will have some positive effects on the economy.
That is the outlook of a number of auto industry experts, including GrooveCar President David Jacobson, who is also forecasting that the increase in business Northeast FIs and car dealers are seeing now in the aftermath of Sandy won't come at a cost down the road.
"This is incremental business that dealerships and financial institutions are getting, not consumers making a decision to jump into the car-buying market early, as they did with Cash For Clunkers," Jacobson said. "That pulled buyers into the market ahead of schedule, and then eight months later there was a lull in business that everyone paid for."
Jacobson emphasized the terrible impact Sandy has had in the New York/New Jersey area, a part of the country he has made his home his entire life. "This is sad what we are all going through," said Jacobson, whose home was damaged and was without power for weeks.
Borrowers stopping into financial institutions for car loans post-Sandy are in a better financial position since they have an insurance check for their car, observed Jacobson. "They are not bringing in a trade they are upside down on, and they are bringing in a down payment."'
Loan Demand Surges
But keeping up with loan demand has been challenging, observed Jacobson, who said he knows of several credit unions that have had to staff up or reallocate resources to keep pace.
The $2-billion NEFCU, Westbury, N.Y., is seeing a strong increase but is not staffing up. Chief Information Officer John De Ieso said demand for auto loans-much of it for new vehicles-has doubled post-Sandy. "We took 300 loan apps last Saturday, that's pretty significant, and it creates challenges. But at this point we are not looking to add staff. We're working extra hours and pulling resources from other areas of the credit union to keep up."
NEFCU has not adjusted its rates, staying with 1.74% APR for top credit up to five years. Used prices are 50 basis points higher.''
One Processor Is Added
At the $5-billion Bethpage FCU, Bethpage, N.Y., auto loans are being funded at twice the normal rate, explained Michele Dean, SVP of lending and investment services. "We have added one additional processor to review and fund loans, and one to two days have been added in reviewing and funding loans."
