How many direct auto loans do you preapprove for members? Yet, how many end up with dealer financing?
Dealer financing is rarely the member’s best option. Financing is where the profit is, and you don’t want to lose it to used car dealerships.
So, let’s dig into a new CUSO, Loanify, to see how they help credit unions grow their loan portfolios… and help members get better deals on their cars.
A Look at the Used Car Market
The pandemic was very disruptive, economically. And the auto industry is very susceptible to market fluctuations.
But the used car market is more resilient. And many people with student loan debt are less likely to buy new cars.
Recently, I bought a used car from a private seller. Initially, I looked on dealership lots, but I didn’t buy for two reasons:
Firs, dealerships charge a premium for used vehicles. The second is that I simply don’t trust the finance folks at dealerships.
Both of those issues relate to the final price of a car. Both of those issues are things a credit union can (and should) help with.
A Look at Loanify
Loanify and their FastPass app simplify the car buying process for credit union members. It’s geofenced, so it alerts credit unions when the member arrives on a dealership lot. And it connects the member to your credit union’s auto lenders.
Starting to sound interesting, right?
Loanify has two main goals:
First, they want to ensure that members have all the info at their fingertips to make a good buying decision. That means educational content, price recommendations, buying tips, and more.
Second, they want credit unions to get the direct auto loan. No more dealer financing. So, when the dealership swoops in at the last second, Loanify’s app is right in their pocket. It’ll let your credit union get a chance to make a counteroffer or negotiate better terms.
I can tell you this much:
If I had Loanify in my pocket when I was car shopping, I might have stuck with a dealership. No joke.
Next Steps for Credit Unions
There’s no secret sauce to growing a direct auto loan portfolio. There’s no single thing that will make or break an entire strategy.
But some things can give you a leg up. Loanify is one of those things.
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