Erie Federal’s indirect lending grew at a faster rate than in-house loans and grew new membership by 23% after implementing AutoSMART.
THE CHALLENGE:
Increase loan volume and add new members.
In addition to a desire to increase auto loan volume, as well as add new members, Erie Federal knew that only booking loans in-house meant it was losing substantial business to dealer-originated loans. The credit union sought to add a new member service that would enable members to research vehicles, then apply for loans and get approval prior to visiting the dealership.
Erie Federal also looked for a service that both promoted auto lending as an added benefit to members and enabled the credit union to tap into members’ auto buying process earlier and capture more member loan opportunities.
THE SOLUTION:
Implement AutoSMART.
After investigating several different options, Erie Federal decided that they wanted a solution that:
- Incorporated all aspects of the auto-buying process that fit well within the credit union space
- Combined a CU-branded vehicle research tool and online loan application with dealer inventory
- Integrated local dealership networks, online decisioning, and NADA and Kelly Blue Book ratings and reviews
“We were looking for a vehicle research tool, something that had an online loan application, local dealership networks, something that we brand with our credit union website,” noted Erie Federal’s Strategic Marketing Analyst Eric Brotherson.
A few other sites offered similar tools, but none were in the credit union space and all offered competing financing. To ensure that the credit union maximized loan opportunities, Erie Federal decided that AutoSMART was the best choice for their credit union.
Easy Implementation and Ease of Use. Incorporating CUDL’s credit union-branded AutoSMART program to Erie’s website was a simple, straight forward online process, easily implemented by the staff at the credit union. When used in conjunction with CUDL’s SMART Approval pre-approval application process, it provides a quick, almost effortless turnaround of indirect loans; both dealers and members appreciate the streamlined loan process. Members also value taking ownership of their financing options and like the ability to bring their loan approval with them when they visit dealers to purchase a vehicle.
The AutoSMART program includes a branded mobile/Smartphone app that provides an additional tool to help members research vehicles and apply for their loan before visiting the dealership. The app also helps credit unions connect with younger members that rely on mobile technology to perform much of the vehicle shopping process.
The AutoSMART program helps to enhance business relationships with local dealers as well. Auto dealerships find value in the AutoSMART program as an online marketing tool that places their inventory in front of members and helps drive additional customer opportunities.
A Window on the Local Market and New Loan Opportunities. The AutoSMART program gave Erie Federal the capability to examine both market penetration and dealer penetration, as well as a look at demographic distribution reports. The ability to tap into members’ decision making earlier in the process also helped better ensure capturing and retaining more member loans.
THE RESULTS:
Indirect Lending Grew at a Faster Pace than In-House Loans.
With AutoSMART, Erie Federal’s indirect lending grew at a faster pace than in-house loans; indirect loans now account for more than 50% of EFCU’s portfolio, five times the volume of its in-house auto loan portfolio, and the percentage continues to grow each year. New members continue to be attracted by the favorable rates and friendly process, and a great service tool means greater retention among those new members.
Since implementing the AutoSMART program, Erie Federal has experienced an average new member growth rate of 23% via the indirect channel.
Members have expressed how much they value both the vehicle research tools and the ability to print out their results to take with them to the dealer. Erie Federal’s CUDL AutoSMART site provides its members with more than 3,600 vehicles in local dealer inventory to research and shop from. Co-branding the site to Erie Federal keeps messaging consistent and seamless, and members feel it’s a comfortable online space that provides a vital educational tool to help them with the vehicle research and purchasing process.
Since implementing the program, analytics have revealed that site traffic to Erie’s co-branded AutoSMART site has steadily increased, year over year. “We have had a steady increase of about 6% annually to our Auto Center page. We can attribute this increase to our marketing efforts as well as having the CUDL AutoSMART product as one of our most visited links,” added Brotherson. The credit union’s co-branded AutoSMART site now averages 90 unique visitors per month and traffic reaches as high as 200 visits per month during peak auto-buying months.
Erie Federal Credit Union has realized a 52% loan approval rate using the SMART Approval process through its AutoSMART site.
Finally, in response to online advertising opportunities through the credit union’s AutoSMART site, dealers quickly realized the value in marketing their stores to the credit union’s members, and bidding became extremely competitive. In the last two years dealer participation in the program has grown by more than 60% and now includes 65 dealerships.
