More people are turning to the internet to conduct research, as online research becomes faster and more convenient. According to J.D. Powers & Associates, 67% of new car buyers use online research tools before purchasing a new vehicle. The Cobalt Group’s 2007 Dealer eBusiness Performance Study revealed an even larger percentage -- 88% of consumers -- use the Internet for research prior to visiting a dealership. Online buying of both new and used vehicles is also picking up speed, as more consumers seek the most pleasant buying experience, in addition to the best deal.
Online research and buying represent a “win-win” situation for both dealers and lenders – dealers get more leads and lenders write more loans – so both parties are working more closely together than ever to help consumers reap the benefits of the Internet age. More than ever, online research tools represent one of the most formidable weapons a credit union can wield to drive growth as slowing vehicle sales and rising costs continue to take a toll on the auto industry.
One of Many Trusted Resources
Consumers have a growing perception that the Internet is a credible source, which has helped further fuel the popularity of online research. Alix Partners recently reported that 41% of consumers believe that the Internet is credible, and, according to Nick Connors, a research analyst with Callahan & Associates, credit unions that position themselves to their members as a trusted resource for online research reap benefits. “Before making the final vehicle purchase, an individual must determine how they will finance that purchase,” notes Connors. “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.”
According to Mike Long of the University of Wisconsin Credit Union (UWCU), the ongoing success of online research and buying is also being driven by the fact that more people are getting used to conducting business online. As people get more used to doing deals on the Web, their comfort level with a major transaction like the purchase of an automobile increases, too. “We’ve got 115,000 members and 69% of them are active online banking members,” notes Long. “By this I mean they don’t just go online to check their balance, but actually conduct transactions online. I think, too, for members the online channel is a way for them to be in a non-threatening environment, and, since they’re going to be shopping online, we want to make sure their experience is the easiest and most convenient for them as can be.” Currently, according to Long, some 40-45% of UWCU auto loans are generated online.
To Joe Mecca, Director of Community and Public Relations for Coastal Federal Credit Union of Raleigh, North Carolina, the wealth of information sources online makes a critical difference. “Today’s consumer is so much more educated when they walk through the door of a dealership. There are more tools out there to help them and more buyers are taking advantage of these tools.”
With an increasing number of consumers (and members) turning to the Internet to do their vehicle research, credit unions that incorporate tools into their websites that simplify the auto shopping and buying experience stand to gain the inside track to financing their members’ next vehicle purchase.