Industry Voices | Credit Unions Join Forces With Dealers for the Win-Win-Win

In spite of the multitude of evolutions spurred by technology, one thing has not changed about the auto industry: Car selling success demands collaboration.

If the endgame is a set of car keys in the hand of a consumer, and the opening game is the creation of that vehicle by the OEM, then the middle game is the selling of that vehicle and the structuring of the deal, something that can only happen with the participation of both auto dealer and finance company. And this is especially true of the unique relationship between auto dealerships and those finance institutions that, historically, are most trusted by consumers, credit unions.

This was underscored by a recent survey of credit union professionals who were almost unanimous about the benefits of dealership partnerships, with 95% saying that partnering with dealerships on auto financing and vehicle leasing is a positive for their members. Those benefits include streamlining the loan approval process and allowing dealers to offer customers more options, greater lending solutions and more flexibility. So, we were not surprised that in the same survey 70% of credit unions reported that they plan to deepen/increase those dealer relationships.

And it is not just the credit unions that are marking the importance of these relationships; auto dealerships who nurture those relationships benefit as well. For example, Cody Carter, internet sales manager of Tustin (CA) Toyota, reports that about 90% of his business these days is vehicle leasing, and a significant proportion of that comes through credit unions.

“With vehicle prices veering out of reach for the average consumer, the affordability of leasing can make the difference between a customer getting into a new vehicle or leaving the dealership empty-handed,” he says. “Making sure that customers are not disappointed means direct and timely communication with the financial institution, and this has been my consistent experience working on vehicle leases with the credit unions that I have deep relationships with.”

About half of the leases that Carter represents are fulfilled by Rize Credit Union, which serves more than 70,000 members in Southern California and Southern Nevada. According to Jeanine Corpuz, chief lending officer of RCU: “Our relationships with dealers are important in so many ways. When it comes to auto finance, our number one priority is helping members obtain a vehicle, with leases being the prominent choice nowadays. Leases have so many moving parts,  which is why it is vital for us to work closely with our dealer partners.

“Our successful collaboration with Cody and Tustin Toyota exemplifies the mutual benefits derived from these partnerships. Ultimately, the partnerships are a win for all parties involved – for the dealership which has a new customer relationship and a vehicle moved off the lot, for the credit union which has a new member and, most importantly, for the consumer who receives a set of vehicle keys within their financial parameters.”

As a company that helps credit unions establish and implement vehicle leasing, CULA sees partnerships with dealerships as indispensable to leasing program success, and, as a testament, our partnerships with dealerships grew by double digits in 2023. For credit unions and dealerships who have not yet joined forces with dealerships on vehicle leasing, here are just some of the benefits of those partnerships that we have seen in our 35 years in business:

            Partnering with local dealers enables credit unions to gain a deeper understanding of local market demands, allowing for the development of tailored, affordable loan packages that align with consumer needs. In turn this provides more options for auto dealers to offer their customers.

            Together, dealerships and credit unions can create customized financing solutions for consumers. These may include special promotions, competitive interest rates or flexible terms that are more conducive to shorter loan durations, making them more affordable for members.

            One of the biggest complaints that car buyers have is the amount of time the auto finance process takes. Collaboration between auto dealerships and credit unions can streamline approval processes. Simplified and expedited procedures can provide quicker access to financing, enhancing affordability by reducing time-related costs and complexities.

            Offering affordable options through dealership partnerships helps credit unions build stronger, long-term relationships with their members while enabling auto dealerships to gain a new service and potential repeat customers.

In the middle game of the vehicle purchase process, auto dealers need the extra game “move” that vehicle leasing offers. After all, with interest rates and vehicle prices stubbornly high and inflation still nipping at consumers’ heels, today’s car shoppers are laser focused on their monthly payment and vehicle leasing, in most instances, means a lower payment. And, even if consumers are priced out of the exact car they want, with leasing’s shorter terms, they have greater flexibility to change to that vehicle in the future. But to win that game in today’s challenging economic landscape, auto dealers and credit unions should partner up to ensure that result for everyone – consumer, dealer and credit union for the win-win-win!