This is a continuation of “Unseen Credit Union Competition“. Last time, you saw what members receive after buying a car or home. Now, we rewind to the buying process itself.

Car Dealers & Credit Unions: A Necessary Alliance

In my business, I work with a wide variety of credit unions. Small to large, urban and rural, with everything in-between. What do they all share? A relationship with local auto dealers.

The degree of this arrangement varies from:

“We send to you, you send to us.”

to

“The dealer holds all the cards and we do what they ask.”

Depending on whether the credit union engages in indirect lending or even cares about direct (and if you’re reading this, I bet you do) says a lot about where they fall on that scale.

Your Members Just Want a Car

Forest Road Speed Blur

Let’s be real. Your members don’t care about back-end relationships. Remember, their focus is on the car. A low loan rate, convenience in application, and speed of closing are what they want.

Why? Because that means car shopping can end faster and car driving can start sooner.

Take a quick poll of your office or members in the lobby right now. Ask them who loves the car buying process. Did any respond like this?

“Yes, we get to do it again! I can’t wait!”

It’s exciting to get a new car. Buying one, though? Not what most would call “fun”. As their credit union, you can help members save time, money, and potential future frustration.

Dealers Sell

The first part of this series, Unseen Credit Union Competition, looked at the slimy tactics of aftermarket firms aiming to sell your members (and anyone who buys a car or home) questionable protection products.

It’s important you make members aware of these efforts. Not only is it the right thing to do, but if something goes wrong, where do you think they’ll go to complain?

Shopping Cart
My car’s dealership had a little shopping cart on the F&I desk.

Auto dealers don’t get involved in this stuff. They simply present their product offerings at time of purchase. Of course, some of this overlaps with your own lineup. But theirs is obviously better, since it’s connected to the manufacturer…or something.

What? It’s not? Oh, and it’s often the same thing you offer, just more expensive?

Given that knowledge, I’m sure your team makes a point to explain this to every member, right?

Of course, maintaining a strong relationship with your local dealers is important. Frustrate them and they’ll stop accepting your drafts, inconvenience your members, and not send indirect loans your way.

Some might even complain to customers about your apparent unwillingness to pay them! (I’ve heard this happen more than once)

You’re in this together; surely, this town is big enough for the both of us!

Equip Members With Great Info

Your mission is to serve your members. And that means arming them with helpful information before they walk in to the dealership. What does that look like?

Lay out what you can offer a member buying a car. Here are some common possibilities:

Clipboard Checklist with Pen
  • Loan (duh)
  • Simplified search and shopping process (By referring to your car buying service)
  • Preferred and/or upfront pricing (Through a dealer group arrangement or car buying service)
  • Rate discount (Combination of services, auto-pay, promotion with partner platform, etc.)
  • Fast and accessible-anywhere application, approval, and funding process
  • GAP
  • VSC
  • Depreciation Protection Coverage
  • Debt Cancellation Insurance
  • Credit Life/Disability Insurance

Anything else? Yes, this is me asking you. Because who knows your credit union best? Hint, it’s not me.

Now we have a detailed list of everything your credit union can provide a member looking for a car. This is your “value proposition”. Look back again. These are the reasons why you are in the auto lending market.

Do each of those items feel like the best possible options for your members? If not, it’s time to re-evaluate. (Disclosure: My company’s Learning Library is full of unbiased info to help!)

Pizza Closeup

Here’s a tasty thought exercise: Assuming both are equally accessible in every way, would you eat at the best pizza place in town, or the 2nd best?

To ensure continued survival and growth, you have to be the best choice for members.

For brevity and with respect for your time, I’m splitting this post into two parts. What did we learn today?

  1. Credit unions and car dealers must work together for the benefit of members
  2. Your members don’t care about what happens in the background. They want a car. Easily.
  3. Dealers offer a lot of the same products as your credit union for a lot more money. Ensuring your members know you can help at a lower cost (assuming the programs are otherwise equal) is essential for your growth.
  4. There’s a Learning Library with a lot of helpful resources for your due diligence (shameless plug!)