Online originations have grown to as much as 15% of Pentagon Federal Credit Union’s direct loan volume since TrueCar started powering the credit union’s online car-buying service in early 2016, Ivan McBride, PenFed’s vice president of automotive lending products and sales, told Auto Finance News.
“TrueCar’s buying service is a significant piece of our direct auto originations,” McBride said, adding that branches, the credit union’s website, and service center calls account for the remaining volume. “Our direct portfolio is 80% of the [credit union’s] overall volume,” he added, which translates to about $2.7 billion of loans, according to AFN estimates.
The PenFed car-buying site allows credit union members to access inventory from certified dealers, check vehicle prices, apply discounts, and secure loans. TrueCar’s online marketplace has enhanced the credit union’s ability to enter the online shopping space, McBride said. “It was an opportunity for us to ride the trend of folks who wanted to do their research before going to the dealership,” he said.
Looking forward, PenFed will continue to scout fintech partnerships to keep up with the competitive market as well as with consumers’ demand for online lending options.
“It’s important to pick the right partnerships, ones that already have visibility,” McBride said. “[PenFed] may not have the same marketing budget as some of the big banks and captive finance companies, so we have to look at those unique partnerships that deliver products that consumers and members want.”
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