The recent Federal Reserve Beige Book offered an interesting perspective for the auto lending market. Uncertainty around trade policy was pervasive across all 12 districts, with the majority showing flat to down growth. Non-auto consumer spending was lower overall – but most districts saw moderate to robust sales of vehicles.
Why? It’s a tale of two consumers. Autos are hot but everything else is not. Consumers are making a mad dash to car lots to lock in deals, in an attempt to avoid increasing tariff-driven prices and anticipated low inventories. Pandemic memories and concerns about continued economic uncertainty have countered consumer hesitancy to make large purchases.
What does this mean for your credit union loan portfolio? If the bulk of your lending team has been focused on mortgage and consumer loans, now is the time to do a little cross training on the auto side of the business! At EFG, we have several custom solutions to propel your revenue growth.
Train for Auto Lending
A lot has changed in the world of auto lending since the pandemic, and that includes all things related to F&I and compliance. The tale of two customers is front and center when it comes to F&I. Continued inflation, high interest rates, as well as economic and employment uncertainty has prompted many consumers to be wary of taking a risk on big purchases such as a vehicle. Credit unions are uniquely positioned to respond with personalized solutions that prioritize the member’s long-term financial wellness.
Our team of experts can work with you to develop custom F&I product bundling and strategies to enable your team to deliver your auto lending growth goals. For example, our team can help you:
- Shift your message from a low APR focus to a value-based message
- Close more loans and increase loan margins by giving them the confidence to sign
- Open new streams of revenue with fee-generating products
- Generate dealer loyalty by acting as a strategic partner
- Engage customers throughout the loan cycle with after-the-sale opportunities
Auto Lending Tools for Success
Debt protection products are a great tool to safeguard the loan while easing potential financial concerns the member might have. Tools such as WALKAWAY® can help you increase vehicle loan volumes by mitigating the risks associated with defaults, collections, and repossessions. And because WALKAWAY benefits have no impact on the customer’s credit score, you’re able to leave the door open for future loan opportunities with your members as you continue to earn their trust and loyalty.
During these challenging economic times, we have the tools and support to help you capitalize on these auto lending opportunities while supporting your members and reducing risk. At EFG Companies, we’re more than an F&I provider, we’re your trusted business partner in auto lending. Together, let’s make more in 2025.
Connect with author Brien Joyce on LinkedIn, or contact him directly at bjoyce@efgusa.com or 770-843-4025.