HAUPPAUGE, N.Y.-GrooveCar has rolled out a new "Pocket Your Payment" offer with a goal of taking some CU members' eyes off low auto loan rates being offered by other lenders.
Introduced mid-January, the deal from the CU online car buying and leasing service lets members skip their first payment. "We thought it might make sense, since we can't compete with some of the very low rates, that we try to focus buyers on other things," said President David Jacobson.
Three New York credit unions-Bethpage FCU, Nassau Financial FCU,, and North Shore LIJ Health System-were the first on board with Pocket Your Payment. Five more CUs will join soon, Jacobson said. Bethpage has had good success with the promotion so far, according to Jacobson, who said the $3.6-billion BFCU has moved 100 Pocket Your Payment loans in a month. It can be especially effective, Jacobson contended, in a tight economy that has consumers strapped for cash. "If a member takes Pocket Your Payment today, their first payment will not be due until spring. That can be very attractive."
Pocket Your payment covers the first payment up to $500, and the deal is good on a purchase through any of Groovecar's 350 New York dealers. To help cover costs, dealers waive their loan commission, generally 1% of the loan price. So on a loan of $30,000, the dealer gives up $300. If the monthly payment is above $300, the CU covers the rest, up to $500.
Jacobson said the offer gives credit unions the ability to fight for better credit quality loans, which banks and captives are also targeting with their offers. "Anyone can get loans if they are buying a 540 credit score. But when you are vying for that 700-plus credit, which everyone wants today, then you need to be creative. It's a struggle." In a twist on the same offer, Jacobson said GrooveCar will soon offer "Bonus Bucks," a $300 to $400 discount coupon members print off the GrooveCar website and take to a participating dealer. "It's as good as cash at the dealership," he said. "The coupon carries the credit union's name."
