This week on CreditUnions.com dives deep into the auto portfolio. We profile credit unions offering leases, balloons, and pre-approvals, as well as take a look at the industry's auto portfolio in fourth quarter 2016.
Here are five data points you need to know:
The Ohio Educational Credit Union is making money by making leases, taking advantage of its already strong business as an indirect lender in its northeast Ohio market.
OHecu has generated $650,000 in net income from its indirect leasing program since launching it in 2014. According to Callahan’s Peer-to-Peer database, OHecu was one of only seven credit unions in its $100 million to $250 million asset class nationwide to offer automotive leasing in 2016.
See how the credit union is so successful in this line of business in "Making Money By Making Leases."
Anheuser-Busch Employees Credit Union has found a comfortable niche for itself and its members with balloon lending for automobiles.
The loans work much like a lease, with lower monthly payments and a balloon payment at a guaranteed future value at the end. ABECU has 2,640 of the loans currently in place.
To see how the St. Louis-based credit union makes a nice niche business out of a lease-like product, check out "ABECU Brews Business With Balloon Notes For Cars."
Credit unions reported new auto loan growth of 16.8% and used auto loan growth of 12.4% as of year-end 2016. That’s up from 16.0% and down from 12.7%, respectively, in 2015. Auto market share increased to 18.0%, a bump of 1.4 percentage points from the year prior.
To learn more about the credit union auto portfolio at fourth quarter, "Auto Lending By The Numbers."
SC Telco Federal Credit Union is committed to improving the financial lives of the cooperative’s member-owners. This focus on developing long-term relationships with members is one of the driving factors behind its distinctive approach to indirect lending.
In 2014, the credit union created a business relationships department with the goal to simply develop more relationships within the communities it serves to generate new loan business.
Learn more about a hybrid indirect business model helps the Palmetto State credit union earn auto lending referrals and new member face time in "A Personal Approach To Dealer-Referred Loans."
Buying a car process can be an arduous, time-consuming task for members. For credit unions, the process includes many touch points during which they can lose member financing, especially when members shop at dealerships that have tenuous relationship with the cooperative.
To retain more point-of-sale business, three credit unions — State Employees’, Digital Credit Union, and Suncoast Credit Union — pre-approve members and provide them with a physical check to present at the auto dealership.
In "3 Ways To Offer Auto Draft Pre-Approvals," the credit unions share what makes their auto draft programs successful.