Smarter Than the Average Automobile Buyer

Dateline NBC, CBS Evening News, USA Today – national media is a-buzz about automobile dealers, telling consumers cautionary tales of exorbitant finance commissions and fraudulent contracts.


Credit Unions Remind Members of Their Biggest Advantage – a Credit Union Membership

Dateline NBC, CBS Evening News, USA Today – national media is a-buzz about automobile dealers, telling consumers cautionary tales of exorbitant finance commissions and fraudulent contracts.

The rush of coverage is enough to worry even the most ardent automobile shopper – more and more of whom are turning to reliable sources for support and education about the car buying process, including credit unions.

Responding to this need, credit unions are dedicating resources – money and time – toward services that assist members in preparing to purchase a vehicle. According to a recent Callahan’s survey, 74 percent of credit union members go online to research vehicles before buying. Credit union Web sites are part of this research. Many are providing online support in the form of loan calculators or tips pages.

Another popular credit union service is car buying seminars. Led by industry experts and held at credit union branches, these educational and interactive classes tackle the typical consumer questions:

  • What automobile will fit my needs?
  • How does my credit rating affect the purchase?
  • How much should I spend on an automobile?
  • What does it take to negotiate a good deal?
  • Should I trade in my current vehicle or sell it myself?

While providing these services to members is a wise credit union practice, it is not an inexpensive endeavor. Credit unions pay handsomely for industry experts’ advice and time. Experts will often charge a speakers fee, which could be upward of $5,000 a day. In addition, there are the costs of maintaining and updating online content as well as possible fees associated with acquiring the rights for any borrowed material.

Credit unions seeking an economical alternative should look to their current business and community relationships for options. For example, credit unions partnering with Enterprise Car Sales, a division of Enterprise Rent-A-Car, tap Enterprise’s account executives to lead car-buying seminars – at no cost. In addition, Enterprise supplements credit unions’ online car buying content by providing a direct link to the Enterprise Car Sale Web site This access allows members to stay on their credit union Web site to search for the perfect car and arrange approval of auto loans.

However, even with education and research under their belts, members still may be apprehensive about stepping into the dealership showroom. Credit unions must let their members know that they have an advantage when they walk on the lot – a credit union membership.

Much of the recent media coverage involving the automobile industry involves actions not in the showroom but in the finance and insurance (F&I) department’s office. Research shows that credit unions are losing potential car loans to these dealership-brokered deals – 70 percent of credit union members who buy a vehicle from an independent or franchised dealer also finance the vehicle through the dealer. Credit unions need to remind members to visit them for an auto loan.

Many credit unions partner with Enterprise Car Sales in order to steer car-buying members back to the credit union for financing. Enterprise Car Sales guarantees that credit unions receive 100 percent of used car loans 100 percent of the time from member purchases. In addition, members are treated to a respectful car buying experience as part of the Enterprise car buying process. Enterprise offers consumers more than 120 makes and models of quality late-model ASE-certified used vehicles that are priced below NADA or Kelly Blue Book values, and include a 12-month/12,000-mile limited power train warranty and seven-day/1,000-mile repurchase policy.

Making an automobile purchase even in the best of times can be an intimidating process. With the current media hype, car buyers are more apprehensive than ever to buy a car. Make sure you are doing all you can for your members to take away the fear … and take in the loans.



This sponsored content article is provided to the credit union community for shared insights and knowledge from a recognized solutions provider in the industry. Please note that the views and opinions offered here do not reflect those of Callahan & Associates, and Callahan does not endorse vendors or the solutions they offer.

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April 19, 2004


  • We are a small credit union and need to raise our loan to share ratio. Suggestions made here will help us and we can also pass this information on to our members and hopefully see more coming to us. Also, on our local news las night here in Albany Georgia we were told of a dealer that was contracting with people and then calling them back in a few days and teeling them that the financing did not go through and they needed to come back in and at that time they were charged a higher rate. The news was asking for anyone who received this call to contact the Attorney General. We do not need dealers like this.
  • While Enterprise Car Sales is an excellent way to purchase a car, I'm surprised that you didn't mention Credit Union Direct Lending, considering that most of your car sales offices are on that program. Tim Bowen