Redwood CU Creates The 'Ultimate Car-Buying Experience'
Redwood Credit Union believes it has found a way to make the most of its repossessed autos and create "the ultimate auto buying experience" for members by creating a one-stop shop for everything from buying a car to GAP insurance and financing in a credit union environment.
"We had been offering auto brokering through AutoLand for years, and we had been selling repossessed or recovered vehicles as well as GAP insurance and other auto-related products for quite some time," said Renee Guerin, CEO of Redwood Credit Union's CUSO, RCU Services Group, of which RCU Auto Services is a DBA. "This was an opportunity to take all of those different elements and put them into one friendly credit union environment."
Part of the motivation was to find a better way for the credit union to sell repossessions. But in putting RCU Auto Services together, the CUSO was able to offer an even more valuable commodity to Redwood CU members: a less-stressful auto purchasing experience.
Doing Away With Intimidation
"Many people find the process of buying a car intimidating. Next to buying a house, this is the most stressful purchase a person makes. We've created a no-hassle environment for them," Guerin explained. "This is straight-forward, non-pressure environment. This is auto sales with the credit union culture in mind. We're not about sales, we're about service."
Guerin said the auto sales portion of RCU Auto Services is very similar to that used by GM's Saturn unit: no-haggle pricing.
"We use the Kelly Blue Book's low value and then mark it slightly up from there," she offered, noting that every car must pass a 125-point inspection and comes with a three-month, 3,000-mile power train warrantee.
When the CUSO decided to bring the auto brokering side of the business in-house, it didn't have to look very far for employees to take RCU Auto Services from concept to reality.
"AutoLand very graciously allowed us to keep our two AutoLand employees," Guerin commented. "[Auto Land CEO] Ron Fry has embraced this new concept."
In addition to the employees who had previously worked for AutoLand, RCU Auto Services did hire some outside candidates, as well, basing their selection on service skills instead of sales skills.
RCUAS' lot can accommodate 72 cars, and the group does accept trade-ins. That has led to a wide variety of vehicles on the lot.
"We have everything from a newer-model Geo Metro that runs about $2,700, to cars in the $50,000 price range," she observed. "You would think we'd end up with a lot of the same types of cars, but that hasn't been the case."
Because it's owned by the CUSO, non-credit union members can come and do business with RCUAS-which also gives the CUSO a chance to sell the benefit of joining the credit union, since Redwood CU has a community charter.
"Anybody who is interested can come do business with us, but so far, most of the interest we are seeing is from the membership," Guerin related. "We haven't been open long enough to have a lot of word-of-mouth outside of the membership, yet."
Indeed, the 2,240-square-foot facility only opened in December 2004. At press time, RCU Auto Services had sold 125 cars.
Although the credit union would love to do the financing on vehicles sold at RCUAS, consumers can bring their own financing with them.
The Point Of Operation
"The point of this wasn't to increase auto lending, though that is a potential result of this," Guerin explained. "Some of the people who come here may not be eligible for a loan with the credit union, and in those cases, we do offer other financing, but it doesn't compete with the credit union because these are loans the credit union wouldn't have been able to make.
"Really, this was about making better use of our recovered vehicles and creating a truly unique experience for the member. They can get everything they need right here, from financing to competitive auto insurance to aftermarket products like mechanical breakdown insurance," she said. "Out intent is to provide the consumer with a truly convenient one-stop-vehicle purchasing experience that can save them time, hassle and money."