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Dealers Benefit from the Credit Union Halo Effect

  • by Phil DuPree
  • October 5, 2021

The nation’s 126+ million credit union members provide auto dealers with a unique opportunity to reach and nurture local shoppers. Auto dealers who make it easy for members to buy from their dealerships, and finance the purchase through their credit union, have an ideal opportunity to capture this loyalty and retain those customers for future business.

This loyalty is one of many credit union member attributes that make them essential buyers for auto dealerships. Credit unions carry a halo effect that helps dealers build consumer trust, confidence and endorsement—no other lending alternative has this influence and benefit to dealers.

The Member Advantage

Members have a strong alliance to their credit union because, unlike national banks, credit unions are locally based and managed—they’re an integral part of the local community—and exist solely to serve their members. Sharing a common tie with credit unions, dealers are a part of their community’s fabric, and they also exist to service the car-buying and maintenance needs of their communities.

For a local business, loyalty means being selected despite the customer having other local choices, notes the website Search Engine Land.

Recent reports from note that credit unions … have unique opportunities to help encourage consumers to shop at local stores … and credit unions, like car dealerships, need their customers to remain loyal. Engagement at the right time will ensure that you’re meeting your people’s needs and providing a high level of service worthy of loyalty, recommendations, and referrals.

Tapping into Benefits of Credit Union Partnerships

Increasingly, auto dealers are realizing the benefits of having strong credit union relationships, and connecting with this influential, growing marketplace of car buyers—the credit union member.

Credits unions, more than ever, recognize the need to leverage technology that caters to their members’ needs, streamlines the entire car shopping and purchasing process, and connects them with trusted local dealer partners. Doing so effectively advances member service and loyalty.

Dealers can make connections early in the member/customers’ shopping journey via credit union branded digital shopping tools and programs, such as CUDL’s AutoSMART program. Unlike other online auto-shopping programs, credit union driven programs make it easier for dealers to better target, communicate with, and brand themselves among local consumers.

Providing members with dedicated digital channels that help them find their next vehicle through a local dealer online, and then complete a smooth, efficient and streamlined transaction at the dealer finance office, is a win-win for the dealer and the credit union.

Credit union branded car-shopping programs that cater specifically to credit unions and their members, like AutoSMART, enable members that are looking for their next car purchase to connect with and engage local dealers. Dealerships that appeal to these buyers by branding themselves as trustworthy and reliable through their affinity with credit union focused channels, can benefit greatly. A preferred dealer status option through such programs can help strengthen that confidence and loyalty transfer.

Credit Union Market Strength

Growth in credit union auto loan origination over the last decade indicates this strengthening relationship between local auto dealers and their communities’ credit unions is parlaying this loyalty factor into more business for both entities.  Credit unions hold 18.2 percent market share of total auto financing as of the second quarter of 2021, according to Experian Automotive, while the 1,100+ credit unions on the CUDL auto lending platform, as an aggregate, are the nation’s number one auto lender in 2021.

In particular, credit unions exhibit strength in the used car marketplace. Credit unions continue to lead finance companies and captives for used vehicle financing, with 24 percent of the market in the second quarter of 2021, while banks held 34 percent of the market (Experian Automotive).

Indirect lending is contributing considerably to this growth, as technology such as AutoSMART and the CUDL platform enables digital loan origination and approval quickly—and enables non-credit union buyers to join their local credit union—while in the dealership F&I office. A win-win, as dealers gain a customer and credit unions a new member.

Credit union specific vehicle search programs have completed the digital bridge to help dealers connect with member car shoppers at the very beginning of their car-buying process. AutoSMART connects 14,000 dealers and their 1.5 million vehicles in dealer inventory with more than 900 participating credit unions and their 43 million members nationwide.

Dealerships who partner with credit unions to connect with and serve members, utilizing credit union-centric search technology, have an ideal opportunity to grow sales and their bottom lines by tapping into a growing market of loyal car buyers that are right in their community. By engaging these buyers earlier in their car-buying journey, dealers collaborating with credit unions have the unique opportunity to earn the buyer’s loyalty and establish a long-term customer relationship.


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Phil DuPree is the chief revenue officer at CUDL. Phil leads the automotive vision and oversees all strategic planning, direction, and development of CUDL’s automotive solutions, encompassing both product and market expansion. He also oversees the sales division, spanning CUDL’s nationwide presence.

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