Credit unions have been growing in the auto finance industry, and one of the reasons that dealerships have been partnering with them is a shared mission to retain customers, dealers told Auto Finance News.
“We want to create lifetime customers, that’s one of our mantras,” Danny Cox, senior director of F&I at Ken Garff Auto Group, told AFN. “We know on the credit union side that it’s about serving their membership base. So there’s a match there, and when you talk to credit unions, they understand the indirect lending model, and they understand what it is that we are trying to do in regards to our customer retention and what they are trying to do.”
The Utah-based Ken Garff Auto Group has over 50 dealerships nationwide, and credit unions make up about 18-20% of the business. Through the partnership, the credits unions can advertise the dealership to their member base, while the dealer can open up their inventory for credit union customers.
Autofair Auto Group shares a similar relationship with its credit union lenders, which make up their biggest lender partners after captives.
“As we strengthened our relationships, the one thing that I found very much in common is that credit unions try to focus on maximizing the experience for their members with long-term retention in mind,” President and Chief Executive Andy Crews told AFN. “As a dealer, that’s exactly what I’m trying to do with my customers. I want to retain those customers long term and provide them the best quality service that I can and keep them for future sales and opportunities.
The focus on customer retention is one way that credit unions can differ from other lenders, who can be centered on how the portfolio is doing.
“The partnership has developed to where we can talk about what we can do to utilize what we both want for that long-term member and customer,” Cox said. “Sometimes you don’t get that so much on the traditional lender side. You talk more about portfolio performance than you do really the customer retention.”5 - Readers Like This Post