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The dealership is a critical factor in vehicle loans - over 90% of all financing is arranged by the dealer. Offering a way to obtain credit union financing right at the dealership is a great solution for credit unions wishing to build their loan portfolios and membership.
Indirect lending is increasingly popular with credit unions and CUSOs across the nation that have seen dramatic increases in auto loan growth as well as membership growth. According to Callahan:
- Credit unions with indirect lending programs grew their new auto loan portfolios by 11.7% in 2003
- The 8,243 credit unions without an indirect lending program, making up over 86% of credit unions by number, showed negative growth
- Credit unions participating in indirect lending are seeing According to call report data, credit unions using indirect lending grew new auto loans an average of 6% during the 12-month period ending March 31, 2003, compared to a 4% decline among non-participants.
- In addition, credit unions using indirect lending received nearly in 2002, compared to non-users.
| For CUs over $50M |
1,004 CUs with IL Programs |
986 CUs without IL Programs |
| Total Auto Loan Growth |
14.9% |
6.2% |
| New Auto Loan Growth |
18.3% |
6.5% |
| Used Auto Loan Growth |
12.3% |
6.0% |
| Member Growth |
3.7% |
2.5% |
As of June 30, 2004, indirect lending accounted for $45 billion in business for CUs, constituting over 11% of the entire industry's loan portfolio. (Source: Callahan & Associates, Inc. Sept. 2004)
CU Direct Connect's model takes a very different tactic than other indirect lending programs. The most important element is that YOU own and control 100% of your own indirect lending program.
With CU Direct Connect, you will:
- Understand how to reach $100+ per member per month in loan volume
- Ensure the program is generating the type and quality paper you want
- Make sure the program is attracting your current members
- Control how many new members you want through the indirect lending program
- Learn how to strengthen relationships with the dealers
- Ensure you're one of the top two lenders at a dealership and your program is competitive
- Use any indirect lending core loan system
- Control program guidelines/changes - not a private company or an out of state CUSO
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