Things move fast in indirect auto financing. If you can’t remember the last time you spoke to your dealer, chances are they’re speaking to, and financing through, someone else.
Credit unions have great momentum from their indirect market efforts, which put $76.4 billion in loans on the books at the end of 2009. Indirect lending opportunities are bountiful, no doubt, but according to data from Aimbridge Lending Solutions, 90% of car loans are made at the point of sale. Credit unions cannot afford to let these loans slip through their fingers.
Dealer relationships are imperative for a program’s ultimate success. “Your funding percentages need to be carefully monitored,” advises Chris Oldag, a credit union industry consultant. If you’re approving 45% of requests but only funding 15% of the approvals, look at your dealer outreach.
Take the initiative to find out where your unfunded approvals are going and see where your deals were beat. Credit unions often lose financing to more attentive buyers, not lower or better pricing. Take a note from their playbook. Stay in touch and provide excellent dealer service by striving for prompt funding, says Oldag.
It’s never too late to fight for the loan, even if the dealer has already contacted another financer. “You can still call the approved borrower and invite them to move the loan to your credit union,” says Oldag. “Perhaps even offer to pay them a portion of the fee you would have paid the dealer as a reward to refinance the loan.”