How many direct auto loans do you preapprove for members? Aaaaand how many of those members end up with dealer financing?
Dealer financing won’t be terribly advantageous to the member. Any former car salesman will tell you that financing is where they really make their money. And it’s also where you lose it!
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
We all know that the pandemic has been extraordinarily disruptive. It’s hard to trust the economy right now. Your members likely feel the same way. And the auto industry is very susceptible to market fluctuations.
But the used car market is more resilient. And if I and my other overeducated, economically disenfranchised Millennials are any indication, there’s a whole population of people who actively avoid buying new cars.
And I know the used car market is alive and well. I just bought one.
I actually went to several dealerships before turning to private sellers. The aggressive sales tactics were obnoxious, but they weren’t what ultimately turned me away.
What really did the trick were two issues. The first is that dealerships charge a premium for used vehicles. The second is that I simply don’t trust the finance folks at dealerships.
Combine them and you get a recipe for always feeling taken advantage of. Dealing with the sneaking suspicion that you didn’t get a good deal, didn’t haggle right, or got bad loan terms. No thank you!
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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