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Maine CUs see car-loan slump as opportunity
PORTLAND, Maine (11/12/08)--Maine has seen an exodus of national lenders willing to make auto loans. The state's auto dealers are turning to credit unions, among others, to help them through the auto-loan slump. Because Mainers who have fewer and more costly options for car loans, especially if their credit histories are stellar, credit unions are seeing opportunities, said Portland Press Herald (Nov. 9). One dealership, Lee Auto Malls, is relying on in-house financing and is forging new relationships with credit unions. According to owner Adam Lee, credit unions "are my new best friends. They want to loan money, they have members who buy cars, and I have a bunch of cars I want to sell." The article interviewed Louis Alexander, a postal worker who used a credit union loan to buy a used 2008 Jeep Grand Cherokee from an auto dealer in Portand. His credit was a little shaky but not poor. He could have received a loan from the dealer, but the monthly payment was too much, he said. His loan from ePort CU, Portland, is for $100 a month less than the dealer financing. The article noted that in today's lending environment, many banks see the auto loans business as more risky and less profitable, compared with commercial loans and home mortgages. Their departure coincides with GMAC's announcement that it would loan only to prime borrowers with credit scores above 700, said the article.
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