The auto industry is slowing in 2007. Each of Detroit's “Big 3” have experienced their share of woes lately whether it be declining sales, contract negotiations, or rising productions costs. Slowing sales and risings costs have also begun to affect the credit union auto loan portfolio. As of this June, credit union auto lending had grown only 1% over the previous 12 months. This is worrisome news for credit unions as auto lending is the second largest component of the loan portfolio at 34.7%.
In order to try to breathe new life into their auto lending portfolios, credit unions are looking for with new ways to drive growth in this slowing category. One area where credit unions can look to bring in new ideas is their website. More people are turning to the internet to conduct research as online research becomes faster and more convenient. It is no different with auto lending. For credit union auto lending, things are no different. Many credit unions are tailoring their websites to provide resources that members can use to not only research rates and complete the entire application process, but also conduct vehicle research.
Credit Unions Adapting to Drive Growth
There are many options available for credit unions looking to expand their online auto lending offerings. Erie Federal Credit Union ($244M, Erie , PA ) has partnered with CUDL to offer their members CUDL's AutoSmart resources. AutoSmart provides co-branded research on vehicle comparisons & pricing, auction listings, and access to dealerships & their inventory listings. By making this a focal point of their website, Erie has seen a near 50% increase in the number of people who access the resources over the past few months.
Another example of a credit union that has expanded their website is Purdue Employees Federal Credit Union ($461M, West Lafayette , IN ). PEFCU has taken a similar approach with a slightly different focus. PEFCU, on top of providing their auto loan rates and applications online, also has their “Car Shopper”, which contains links to various national research resources that cover topics from fuel efficiency to vehicle safety ratings. Another feature of their website is their own auto purchasing resource, as well as the links to a number of auto dealers in their local area.
Strengthening Member Relationships Early On
Today there are a multitude of resources available online for people to access. The internet has grown as a resource as people's perception of its credibility have also increased. According to a recent survey from AlixPartners, 41% of consumers believe that the internet is a credible resource, a staggering figure when compared to the 2% Consumer Reports received. Credit unions that are willing to take advantage of this resource can make a difficult process easier, faster, and more convenient for their members.
By becoming a trusted resource for online research, credit unions can position themselves as an ally very early on in the car buying process. Before making the final vehicle purchase, an individual must determine how they will finance that purchase. If they have been working with the credit union from the start, and using the credit union's resources to find their vehicle, chances are far greater that they will turn to the credit union first when financing that purchase.
To hear credit unions discuss how they have been adapting their websites and other online resources to drive auto lending growth, access “Using the Online Channel to Ramp Up Your Auto Lending” a webinar recording brought to you by Callahan & Associates.