It’s an old problem and lots of credit unions are facing it. You need loan volume and would love to have members think of your credit union first when purchasing a car. But the competition is as fierce as it is extensive—local auto dealerships use irresistible rates for promotion, and members are offered other deals from local banks and competing credit unions. Trying to get car buyers to even consider your credit union’s rates is like shouting in a windstorm.
What’s a credit union to do?
John Buckley, CEO of Gerber Federal Credit Union (FCU) in Michigan, has a unique solution and it’s working like a charm for his multi-segment, federal, multi-state credit union: let members get auto loans wherever they like, then offer to refinance the loan a month later.
It sounds too easy to be true, but it works.
Members are at the dealer to purchase a car. Car dealerships have commission incentives to get people to finance and, where they don’t, they have volume arrangements with lenders that get them access to special financing rates. Unless you’re willing to play ball with a dealership, odds are good your members won’t hear about your loan options before they sign on the dotted line.
