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CU System
CUs partner with car dealers to boost auto sales
BAKERSFIELD, Calif. (11/19/09)--Credit unions in Bakersfield, Calif., are providing incentives to their members and working with auto dealers to spur car sales, according to a California newspaper. Steve Renock, CEO of Kern Schools FCU, told The Bakersfield Californian that both credit unions and auto dealers could “use the business.” Renock met with the Bakersfield New Car Dealers Association a week ago to work on an agreement to spur sales at the dealers and more loans for the credit union. The $1.7 billion asset Kern Schools FCU plans to offer loans with rates as low as 4.25%, and list the names of association dealers in its newsletter. In return, individual dealers will offer discounts to credit union members, the newspaper said. Kern Schools hasn’t made as many auto loans this year as it has in the past. In October, the credit union made 63 loans--a 72% drop from last year. Kern members bought 1,034 new vehicles in October, which is 38% fewer than last year, and 22% less than September (Bakersfield Californian Nov. 14). Doug Kileen, president/CEO of Safe 1 CU, said its members are borrowing less, which is why loan numbers have decreased. Many auto manufacturers also are offering 0% financing--which is hard for the credit union to compete with, he added. To encourage sales, Safe 1 recently offered a 30-day sale where it lowered auto loan rates to 3.9%. The sale drew about $10 million in loans, the paper said. Other incentives recently undertaken by credit unions to spur auto sales include CUCorp’s “Invest in America” program, which offers discounts on Chrysler and General Motors vehicles to buyers who receive financing through credit unions.
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