MADISON, Wis.-The $1.7-billion UWCU is finding it can take on manufacturer deals this year, with new car loans showing a marked increase.
"We are seeing an opportunity in the purchase market as opposed to refinance," said Chief Credit Officer Mike Long. "Last year we recaptured a lot of members' auto business by refinancing loans they had elsewhere back to the credit union. So far, in 2013 we're capturing more direct and indirect business as a result of the purchase market. In fact, our volumes are up 17% year over year through April."
Long attributed the results to providing excellent dealer service and fast loan approval and funding.
Worn Tread
But Long reminded that margins continue to be as thin as worn tire tread, which means credit unions have to be cautious to book high-quality loans. He said there just enough spread with the current low rates-UW is charging 2.79% APR or new and used-to account for credit loss.
"Pay attention to extending term and dropping down credit tiers. As we try to compete with captives we have to make sure we underwrite the credit properly, accounting for the risk and not putting ourselves in bad situations."
