VANCOUVER, Wash. (11/27/12)--Auto trade industry publication Automotive News has published a Q & A with a Vancouver, Wash.-based auto dealer who says credit unions account for more than half of its loan volume.
In the article, "Can't beat credit unions? Join 'em," (Oct. 17) , Ralph Larson, finance and insurance director with Dick Hannah Dealerships, noted that if auto buyers financed their last vehicle at a credit union, the dealership's group policy is to send the credit application for their new vehicle to that credit union first.
Why? Because the dealer had a high rate of cancellations on its financing and insurance products just days after people bought vehicles at the dealer. The dealership thought it might be a problem with disclosures, but when it took a closer look, it found out that the buyers were simply refinancing the car at their credit union.
The dealership also found out that working with a single credit union to offer a lower payment didn't work if the consumers were members of another credit union. "The problem is the customer's loyalty is deeper than the quarter percent," Larson told Automotive News. Some people, he said, would pay more to stick with their credit union--and often the credit union might match the offer anyway.
Now the credit union gets a first right of refusal on financing the loan, and 53% of the dealer's loans are financed through credit unions. For more information, check out the full article at the link.