Tag Archive | "CU Direct"

CUDL: Credit Unions Capitalizing on Bank Retreat

ONTARIO, Calif. — Credit unions and captives continued to take advantage of the pullback by banks in the second quarter. The message coming out of CU Direct (CUDL)’s Sept. 28 webcast is that credit unions need to act fast before banks reconfigure their strategy.

Banks continued to hold the largest share at 32.3% in the second quarter, although the segment’s hold on the market fell 2.5 percentage points. Captives picked up some of that, increasing their share by 1.6 percentage points to 28.6%. Credit unions were the biggest benefactors of the pullback by banks, increasing their hold on the auto finance market by 1.6 percentage points from a year ago to 20.3%.

CUDL executive Michael Cochrum said the subprime pullback was only partially to blame for the bank retreat, noting that competition also played a role in the segment’s pullback. “They feel like competition is too strong, and it’s difficult to maximize your profitability in a market that’s highly competitive,” Cochrum said, adding that the real competition lies in the used-vehicle space.

On a quarter-over-quarter basis, captives continued to pick up share in the second quarter, while credit unions led the way in terms of auto lending growth. Despite the pickup in originations, credit unions saw their share fall two percentage points from the previous quarter to 24%. Banks, however, saw their hold on the market fall 5% from the first quarter, while captives took back some share from the previous quarter.

In the new-vehicle space, captives continued to dominate with a share of 53.2%, up from 52.2% in the year-ago quarter. Banks saw their share of new financing fall from 31.7% in the year-ago period to 28.8%, while credit unions increased their share slightly from 11.4% to 12.7%.

In the used space, banks held the largest share at 35.2%, which was down from 37.3% in the year-ago period. Closing the gap were credit unions, which increased their share 1.6 percentage points from a year ago to to 26.7%. Captives captured 8.1% of that market, down from 7.4% in the year-ago quarter.

Cochrum said the used-vehicle market represents a key opportunity for credit unions to grow their share. The key for that lending segment is strategizing with dealers to create more reasonable loan terms, especially since leasing seems to have plateaued after five years of growth at about 30.8%.

Cochrum attributed the flattening of leasing to residual values, with the glut of off-lease vehicles causing collateral values to fall. He said captives are likely to respond by shifting from leasing to buying programs, which he believes could present credit unions with an opportunity to offer leases on late-model used vehicles to buyers looking for affordability.

In the second quarter, used-vehicle leasing accounted for 3.61% of the lease market, down from 3.71% in the year-ago quarter.

Focusing on the high-risk tiers represents another option for credit unions to grow share. The segment, however, has mostly focused on high-quality buyers — the reason for the segment’s higher average credit score than all other lending segments.

To move downstream on the credit spectrum, however, will require a better understanding of the risk associated with lower credit scores, Cochrum said. Credit unions have also been known to underprice loans involving borrowers with credit scores below 700, the executive noting that the segment will need to rethink pricing strategies in order to maximize returns in the high-risk tiers.

“Even above a 700 credit score, credit unions are priced 50 to 80 basis points under their competitors,” he said.

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Fidelis PPM, MaximTrak Announce Integration

SCOTTSDALE, Ariz. — Fidelis PPM, a CU Direct company, announced today that its retention-building prepaid maintenance software is now integrated into MaximTrak Technologies’ F&I platform.

This integration enables F&I departments using the MaximTrak platform to deliver e-contracting functions between systems, providing dealerships with a paperless solution for presenting, validating, and registering Fidelis products.

“Dealers who offer their customers Fidelis PPM-brand prepaid maintenance programs see first-year customer retention rates of 85% and 65% at year three — with significant growth in customer-pay service revenue as well,” says Ryan Williams, president of Fidelis PPM. “Now, dealers using MaximTrak have a proven customer retention and service revenue program that works even more efficiently and conveniently, and more easily measure results.”

Aside from improving customer service and the presentation of Fidelis’ product programs, the integration will provide users with sale-through performance results through MaximTrak’s reporting tools. Additionally, the connection will eliminate data transfer bottlenecks and delays.

“MaximTrak is the leading digital F&I platform and dealers using it to present products to car buyers consistently show increases in [profit per vehicle retailed] and product penetration,” said Jim Maxim Jr., president of MaximTrak. “We’re excited to now have the Fidelis PPM program integrated with this powerful F&I presentation and sales platform.”

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Former AutoNation Direct Head Joins CU Direct

ONTARIO, CALIF. — CU Direct today announced the appointment of Ron Frey as chief strategy officer of its automotive solutions. He joined the company this month.
Frey will oversee the planning and direction of automotive solutions as it relates to product and market expansion. This includes oversight of existing products, including CUDL, a credit union auto financing platform, and AutoSMART, an online vehicle-shopping site for the credit union industry.

“Ron’s expansive leadership, partnered with strategic planning, has led him to succeed in implementing cutting-edge technology solutions,” stated Tony Boutelle, president and CEO of CU Direct. “We are excited to have him join our team, as we continue to evolve our innovative automotive products to better serve our 1,000 credit unions and more than 12,000 dealer partners.”

Before joining CU Direct, Frey spent 30 years serving in the automotive and credit union industry. His most recent position was chief strategy officer and president of AutoNation Direct. He has also served as CEO of Autoland and COO of TrueCar.

“I am pleased to be joining the CU Direct Team, where I can leverage my background in technology innovation, deep automotive experience and credit union experience,” said Frey. “I look forward to digging in and looking for ways to bring innovation and value to our credit unions and dealer partners.”

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CU Direct Expands Into Canada

Ontario, Calif. — CU Direct Corp.’s CUDL brand expanded into Canada with the launch of Auto Premier in Montreal, Quebec. The company partnered with Canada’s largest credit union/CO-OP, Desjardins Group, in developing the credit union’s new member auto research and buying Web site, eSpaceAuto.com. Desjardins Group, based in Levis, Quebec, serves 5.2 million members throughout Canada, and has C$200 billion in assets.

The credit union’s new Web site will help connect its members to its more than 2,200 auto dealer and merchant partners throughout Quebec to shop for and buy their next vehicle. It will also provide Desjardins Group with a key resource designed to enhance both member brand awareness and overall member satisfaction, and help drive member financing at the dealership.

“The partnership between Desjardins and Auto Premier will allow automobile and durable goods dealers in Quebec and Ontario to market their inventory at large and benefit from Desjardins’ five million-member network,” says André Chatelain, vice president and general manager of Desjardins Card Services.

For the credit union’s members, eSpaceAuto.com offers an advanced vehicle shopping experience, providing robust research capabilities and lending services, as well as an expanded library of online shopping resources designed to help them get a good deal on their next vehicle purchase.

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