The automotive sales segment has been strong in this country for years, fueled as much by low gas prices as consistent ongoing consumer demand.
Credit unions have reaped their share of the bounty, ending the third quarter of 2017 with auto loan growth totaling more than $329 billion and marking 17 consecutive quarters of auto lending growth measuring in double digits. And so far, 2018 is another banner year. The majority of this growth is fueled by Indirect or Point-of-Sale lending.
If your credit union is not engaged at point-of-sale in the auto lending marketplace, you are missing out on this tremendous area of business growth.
A Significant Market
The auto lending market remains strong for both new cars and used car sales and financing, with used auto loans accounting for the majority of Credit Union auto loans, 60% with the balance going to new car loans. In fact, overall auto loans account for nearly 35% of ALL Credit Union loans – second only to mortgage loans in percentage volume. If you have been trying to capture more auto loans, and you are not succeeding you may want to take a new approach. If you are not at Point-of-Sale, where loans get closed and placed with Lenders, simply put, you need to be where the business is. Over the years I’ve heard every argument and issue with why a Credit Union is not or cannot implement and manage an indirect program, but the fact is, if you are not where the business is, you can’t get the business.
Maximizing Profit, Reducing Risk
Auto loans represent the best opportunities of all secured loans. Durations are relatively short (Most loans even if originated for terms well over 60 months rarely go to term) with yields and spreads that provide stable income and profitability that CFOs and CEOs are looking for. Auto loan penetration levels in Credit Unions have been rising, while both delinquency and charge-off rates have been held in check. Charge-off ratios for credit union auto loans (inclusive of indirect loans) increased just 6 basis points on an annual basis in 2017, in line with a delinquency rate of 0.65%. Bottom line, the numbers bear out the fact that credit unions can and should compete at point-of-sale to achieve lending success.
The automation provided by Lendsys allows any credit union to cost effectively implement and maintain a quality point-of-sale program.
Developed by Lenders, for lenders
Utilized in multiple Credit Unions and other lenders today, the Lendsys platform may be the answer for you.
If you’ve been holding off on implementing any form or automated lending or point-of-sale program, contact us today to see if Lendsys is the solution you’ve been looking for.