Wright-Patt’s ‘Wheels For Work’ Keeps Rolling Along

A second-chance auto loan program from Wright-Patt Credit Union ($9.1B, Beavercreek, OH) is helping credit- and income-challenged members get behind the wheel of a car so they can get to work.

Wheels For Work launched in 2019 to help members who didn’t qualify for auto loans through traditional underwriting criteria. Unlike some second-chance auto loan programs, Wheels For Work is not priced differently from the rest of the credit union’s auto loans. The loan program does, however, include coaching to educate participants about the ins and outs of borrowing and budgeting.

“Members aren’t penalized for having to have that second look,” says Kelly Preston, director of consumer lending. “We focus on getting the member to understand how the car loan works and why it’s so important to make payments on time.”

That includes ensuring applicants understand not only the importance of on-time payments but also insurance requirements and costs, the value of regular maintenance, and more. To do this, the credit union pairs participants with one of three Wheels For Work specialists to build a one-on-one relationship from application to education, funding to pay off.

One-On-One Work For A Second-Chance Auto Loan

The majority of Wheels For Work borrowers fall into the “second chance” bucket; however, some are younger borrowers who don’t know as much about credit. Regardless, the credit union’s specialists provide every applicant with the same kind of education.

“We almost take them back like we would if it’s someone who’s brand new to credit and doesn’t know anything about loans,” Preston says . “We start from an education standpoint. We try not to focus on what happened in the past — it’s a forward-facing program.”

In fact, the credit union can afford to look forward because that education angle is one of the defining components to the program’s success.

“The value of educating members can’t be overstated,” Preston says. “It’s shocking how many members don’t know what a car loan is or why they need to make that payment. And it’s not just for Wheels For Work — we’ve learned that lesson with everything. If we can start members off understanding why it’s important to have good credit, that helps everyone in the long run.”

Wright-Patt rolled out Wheels For Work with just one dedicated specialist. Over time, that team has grown to include three people who all work closely with borrowers throughout the lending process — including into collections when necessary. This ensures that if the borrower gets behind on payments, they already have a trusting relationship with the person reaching out from the credit union.

“It can’t be understated how involved each of our Wheels For Work specialists are with each member,” says Chris Mulkey, vice president of consumer lending. “Their job is to work one-on-one with these folks, and it’s been a difference maker, for sure.”

That kind of rapport requires a special kind of employee. Wright-Patt’s hiring managers look for a distinct skill set that blends knowledge of underwriting, risk, and collections with empathy and a heart for service. This last part is so important that team members’ performance goals focus on the number of members helped rather than the dollars lent.

The Ins And Outs Of Wheels For Work

For this alternative lending program, Wright-Patt takes an alternative marketing approach. Rather than advertise Wheels For Work, Wright-Patt saves it as a back-up for those who don’t quality for traditional auto loans. The credit union evaluates all loan applicants through traditional underwriting criteria first to ensure it is meeting fair lending requirements. If would-be borrowers don’t qualify for a traditional loan program, this second-chance auto loan might be an option.

To date, the program only applies to direct loans. And although the credit union has discussed tapping into the indirect channel, its current focus is on members who already have a relationship with the credit union.

“We’ve been successful and want to expand as much as possible, but we want to be respectful of the inner workings that have made the program successful,” Mulkey says. “We don’t want to lose that touch with the member up front.”

Borrowers can apply Wheels For Work loans toward the purchase of a new car but most generally opt for a used vehicle. The credit union caps loan limits at $36,000, with an average loan amount of $12,688.55. Specialists also pull a CarFax report on each vehicle and walk through that with the borrow to ensure they understand the vehicle they’re buying and any potential problems.

“We’re fortunate that we’re able to offer extended warranty coverage,” Preston says. “We encourage members to purchase it if their budget can afford it, even if they don’t get it from us.”

A Wheels For Work loan takes slightly longer than a traditional loan to process because it requires more in-depth questioning, plus gathering proof of income and determining collateral can prove challenging. However, Preston says it isn’t an extended timeline and most members don’t mind if the process takes slightly longer.

“They’re usually just pretty excited we’re going to do the loan,” the lending director says.

Borrowers’ past credit mistakes — including repossessions — also can present hurdles, although the credit union is often willing to accommodate a bit more risk if specialists understand the bigger picture. Unfortunately, members with bankruptcy indicators or who have previously struggled to pay back the credit union might not qualify.

Loyalty Is Its Own Reward

Car loans comprise approximately 36% of Wright-Patt’s total portfolio, with balances at $590.9 million at the end of the third quarter of 2024. According to the credit union, Wheels For Work loans comprised only 0.6% of total originations in 2024 but represents about 5% of the total direct auto loan portfolio.

Overall loan delinquencies at Wright-Patt stood at 0.94% at the end of the third quarter — about 21 basis points higher than its peer average. Wheels For Work delinquencies last year were closer to 3.5%. But put another way, almost 97 out of 100 second-chance auto loans are “doing just fine,” Mulkey says.

The VP notes that delinquencies are rising on a variety of products across the industry, and Wheels for Work plays an important role in borrowers’ lives.

“Given the intent and the purpose of what this program delivers holistically, it’s worth the delinquencies and losses we incur,” he says.

The credit union has implemented a variety of changes since the program’s inception to provide stronger guardrails. For example, program eligibility now requires 90 days of membership. The credit union also has increased loan limits in response to rising car prices.

It really boils down to how in-depth we can get at that initial interview stage to truly understand the needs of that member.

Wheels For Work has been successful enough that Mulkey and Preston both say they’d be willing to explore expanding the model to other products, although tying collateral to the loan provides important added security.

“It really boils down to how in-depth we can get at that initial interview stage to truly understand the needs of that member,” Mulkey says.

The biggest takeaway for other credit unions might be the benefit that comes from giving members a second chance.

“The rewards you’ll get from the membership can’t be described,” Mulkey says. “We all face things in our lives where we remember who was there for us when we needed them. I think that’s what we’re seeing — the loyalty factor of being there for these members when no one else is. And you can’t measure that in dollars.”

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