HAUPPAUGE, N.Y.—Credit unions should continue to see strong auto loan growth in 2016—as long as they don’t simply focus on rate, asserts one analyst.
Frank Rinaudo, senior VP at GrooveCar, said credit unions must find ways to better engage with members in the entire car-shopping/auto loan process, and connect with more Millennials.
“There is great growth potential in auto loans for 2016 and beyond,” said Rinaudo. “This consistently remains a hot-button topic as credit unions look to provide outstanding rates and member service. Selling on rate alone, however, will not entice members.”
The average age of a credit union member is in their late 40s, said Rinaudo. The challenge credit unions face is serving this group while also establishing relationships with younger members coming up behind them—Millennials.
Coveted Millennials
Rinaudo stressed that with Millennials comprising only 7% of the average credit union membership, the group’s borrowing potential must be recognized today.
“There are favorable statistics on the habits of the Millennial, which place credit unions in an excellent position to reap the rewards of doing business with them,” said Rinaudo, noting that Millennials don’t like to do business with big banks and are loyal.
Frank Rinaudo, GrooveCar
To attract these younger members, Rinaudo said credit unions must offer the right incentives, noting that Millennials prefer to conduct business online via their mobile devices, and enjoy the personal touch and personalized services.
“Credit unions fit well with the Millennials as their ideal business partner,” stressed Rinaudo. “If credit unions are not going after this market they should ask themselves ‘why not?’”
Choose Right Course
When it comes to embracing a new market, there has to be a “defined path” to reaching goals, said Rinaudo.
“Plans are only as good as the execution. From my perspective, we see credit unions falling short in sales follow-up,” said Rinaudo. “All leads should be treated as a potential new member, a long-term relationship waiting to be nurtured.”
Without follow-through, many credit union efforts will fall short, reiterated Rinaudo.
“When this happens, things begin to unravel and there is a ripple effect,” he said. “To address this, GrooveCar works with credit unions on their internal structure and assists with lead follow-up. Our hands-on customer service is available with our top-tiered programs. Our CU Xpress Lease product comes ready for deployment and provides a clear route to increasing auto loan portfolios. And we stand ready to provide all ongoing marketing, technical and sales consulting support.”