BY ED SWANSON
First-Time Buyers (FTBs) represent a very lucrative, yet potentially risky portion of your membership. Credit unions can position themselves for long-term success by implementing proven strategies for FTBs. The key, like with many things in life, is to start off by asking the right questions:
- Are their parent’s members? The majority of your FTBs are younger, so it would help to know something about their family history.
- Do they rent or live with parents? What is their payment history with any landlords?
- What is their motivation?
- Is this the first car they’ve ever purchased from a dealer?
- Do they know or did they look up the value of the vehicle they are buying?
- Do they have a commitment for the insurance?
- Do they know the cost of the insurance?
- Where is their checking and savings accounts?
- How much money have they saved to put down?
- What is their level of education?
- How did they get their last job?
- What is their performance evaluation?
- Do they like their job and what are their future prospects there?
A good interview is absolutely essential – you want to get to know these members. It takes a little more time, but it can mean the difference between having a profitable long-term relationship vs losing money on a bad loan. (LSCI has developed a special First-Time Buyer checklist, which you can see a snapshot of on the next page).
In addition to asking the above questions, it’s important to establish and follow guidelines for FTBs. LSCI recommends the following:
