Lenders delivering greater protection produce greater value
Member-focused credit unions can capture valuable auto loans versus captives through affordable protection products that retain vehicle value while differentiating themselves. Rising interest rates and increased financial volatility are prompting credit unions to promote value to capture profitable auto loan business. While supply chain issues are expected to keep inventory low for the remainder of 2022, OEM financial institutions should become more competitive through incentives. Customer-focused protection products help credit unions capture greater market share. In addition, credit unions would be well served by re-focusing on a member-first mindset. Credit unions should rethink their product criteria for members and provide loan products that are accessible to all people, regardless of credit profile. With low delinquency and charge-off rates, auto loans with value-driven protection products can drive revenue for credit unions.