Out of $1.4 billion in loan portfolios recently reviewed for our credit union clients, 41% of all loan balances are in new or used auto loans.
Out of $1.4 billion in loan portfolios recently reviewed for our credit union clients, 41% of all loan balances are in new or used auto loans.
We don’t see a whole lot of Loan-to-Deposit/Share ratios north of 75% these days. We all have money to lend and auto loans are certainly on most of our radar screens.
So, I want to focus your next 5 minutes on thinking about auto loans.
Great News for 2014!
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In December of 2013, Consumer Reports issued a report on New Car Buying Advice. Their very fist tip … “Set up your loan in advance.”
We need to educate folks that getting pre-approved can:
- Focus their vehicle search
- Save them money
- Reduce the pressure at the dealership
Turn Indirect into Direct
Analyze your auto loans. How quickly are they typically paid off? 36 months? 48?
Identify your trends and get out in front of them. Offer your indirect loans an incentive (a few months prior to your average payoff date) to get their next loan through your institution.
This same strategy will help you to retain existing loans. Make sure they get their next loan with you too.
Treat Them Better Than the Dealers
No one ever wanted a car loan … They want the car!
That said, we need to work harder to make consumers notice us.
Whether the loan is direct or indirect, write a hand written thank you note for the business. Show them how you can save them more money. Call them in two months and see how they like the car. Build a relationship!!!
When it’s time for the next car, they may not go back to the same dealer, but they sure will know where to go for the loan!!!
In the end, we need to address all 3 reasons we lose loans to dealers … Be more convenient … Educate them that you do auto loans and why it’s better to come to you … and do whatever you can to make the car buying experience easier and less stressful (despite the dealer’s tries to do otherwise).
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