As Covid-19 is putting a pause on new car purchases and struggling rental car companies such as Hertz and Enterprise are selling their fleets at rock-bottom prices, more consumers are buying used cars.
Most of these buyers will need to finance their purchases, presenting a great opportunity for credit unions to attract more members. However, not many consumers understand the advantage of borrowing from a CU. Here’s what a credit union can do to originate more auto loans in the post-pandemic market:
Promoting the Benefits of Getting Auto Loans From a Credit Union
Build awareness and educate your audience why they should consider getting an auto loan from a CU by communicating these benefits:
- Lower interest rates, fees, and loan minimums: the interest rate ofmost car loans from credit unions are at least 1% lower than banks. You can compare the current bank rate with your interest rate, then show the savings members can get over the life of the loan.
- Member-owned organization: members will not only be able to get better rates but also be paid a dividend from the CU’s profits. The sense of community is also attractive to many consumers.
- Personalized and customer-friendly services: a CU has more flexibility in the underwriting process and can tailor auto loans to accommodate members’ circumstances, which could be a key decision factor in the post-pandemic economy.
- Broad product portfolio: a full-service credit union offers a wide range of products such as consumer banking, mortgages, home equity loans, unsecured personal loans, credit cards, etc. so members can consolidate their financial services for better rates and convenience.
- Easy to join: some people have misconceptions about the eligibility for joining a CU. Show consumers that it’s easy to become a member at your credit union — especially in the post-pandemic environment, you should emphasize how they can manage most of the loan application process online.
How Credit Unions Can Originate More Auto Loans
Here are some key strategies to attract more members to apply for auto loans in the post-pandemic consumer market:
Educate and Build Trust
Consumers are more cautious about their money. You can build trust by positioning your brand as a trusted advisor and educating them on using the right financial products. To build relationships with members, listen and show them that you understand their needs. Also, develop informative content (e.g., resources for buying used cars) that strengthens your expert status so consumers will be more likely to follow your recommendation and apply for an auto loan with your CU.
Offer Competitive Products
Many consumers have the misconception that credit unions don’t offer products and services on par with big banks and this could prevent people from considering auto loans from a CU. Building and promoting a portfolio of competitive products, including auto loans, credit cards, personal loans can help you expand your reach and build awareness on the benefits of borrowing from a CU.
Up Your Digital Marketing Game
Millennials, who tend to do a majority of their research online, make up a large portion of the used car market. You should implement an omnichannel marketing strategy that includes both online and offline touchpoints to reach this market. This demographic also uses technology extensively so having a mobile app and an online member’s portal for users to manage their loans can help you attract this consumer segment.
Deliver an Outstanding Customer Experience
Customer experience is surpassing products and pricing as a key differentiator so it’s important that you leverage the latest technologies, such as a loan origination software designed specifically for credit unions, to automate workflows and deliver a streamlined member experience that makes applying for a car loan as painless as possible.
Look for a platform that delivers a secure, scalable, intuitive, and responsive suite of solutions that allows members to access the loan application process from their smartphones while increasing the efficiency of the approval process through automation. In addition, seek out a cloud-based solution that enables your staff to access the platform from anywhere so they can remotely assist members who want to avoid visiting a physical location.
Now more than ever, credit unions need to stay competitive by meeting consumer demands. Using innovating technologies, such as loan origination software, you can streamline workflows, increase efficiencies, and improve member experience so you can originate more loans cost-efficiently.