By W.B. King
In response to pandemic-related restrictions related to in-person auto sales transactions, credit unions are turning to virtual technologies.
“The many restrictions placed by local municipalities due to COVID-19 created many challenging obstacles,” said iTHINK Financial Credit Union Director of Consumer Lending Troy Harrington. “A virtual car sale resolved most of the issues including staffing, space and hours of operation challenges.”
The $1.8 billion Delray Beach, Fla. -based credit union, which supports 100,000 members and 22 branches, recently partnered with Auto Link and its Virtual Car Sale (VCS) solution.
“From Auto Link’s founding, our mission has been to provide credit unions with the tools, both technical and marketing-related, to effectively compete in the auto vertical,” said Auto Link Founder and CEO Ed Bourgeois. “Auto loans are the bread and butter of credit union member engagement and profitability.”
The Harahan, La.-based Auto Link has 170 clients in the financial institution space, all of which are credit unions.
“Technology has been a game changer in member auto research, buying and financing as members spend 12-14 hours online before buying a vehicle and auto loans begin ‘online’ during this process,” Bourgeois said. “Dealers, banks and internet marketers all use digital tools and artificial intelligence (AI) to attract consumers during this 12-14 hours [time period] online.”
Virtual Car Solution
For iTHINK Financial Credit Union, Harrington said the process was seamless and integration into the credit union’s tech infrastructure was “plug-and-play.” The process, he added, usually takes between 30 and 60 days.
“Auto Link did an outstanding job of developing the tags and reporting exports needed,” he said. “There is minimal IT interaction. Educating the credit union team members was as simple as an email.”
Bourgeois further explained that it takes roughly four weeks to onboard a credit union. This process includes meetings that address lending and marketing training, education and guidance. Getting the actual Auto Link on the credit union’s website, however, can be executed, with the webmaster’s assistance, in 20 minutes.
“Once a credit union has Auto Link on their site, getting the VCS up and running is a simple process and can be done in one day. We walk the credit union through a questionnaire of options. For instance, our robust functionality provides many options on how the VCS will be displayed/promoted (VSC widgets) on their website, including on what web pages and which dealers’ inventory is presented,” Bourgeois said.
In most cases, Auto Link typically deals with the credit union’s webmaster, so generally the IT department is not involved. However, the company does offer a marketing loyalty benefit (myEZ Car Car) to all vehicle loan members of the credit union. While it is optional, Bourgeois said most credit unions use this benefit.
“To use this loyalty benefit, the credit union sends us a file of basic information on each vehicle loan. Therefore, someone from IT will generate this CSV file to send us. For several core systems, we have developed automation for generating this CSV,” Bourgeois continued. “Minimal training is required for VCS but we do have a web call with the lending and marketing teams to demo the functionality and train the credit union staff on how to access the VCS-specific loan leads and data analytics.”
The VCS model, Bourgeois noted, is based on Auto Links’ knowledge of technology/digital solutions, auto world manufacturing, retailing and digital use, as well as continuing feedback received from credit union executives.
“Credit unions used to have actual car sales in a local mall or branch parking lots where dealers would bring in vehicles, perhaps 100-150 vehicles. This was effective in generating loans but expensive and would typically last only one weekend,” he explained. “The VCS takes advantage of the way members shop (online), can provide much more inventory as well as dealer support and is much more cost effective in not having to haul vehicles to the sale location.”
As a recent client, Harrington noted that VCS ROI figures weren’t yet available, but that early indications are positive.
“The preliminary data is showing a significant lift in bookings when compared with our minimal investment,” he said.
To place a finer point on ROI, Bourgeois offered statistics from another client, the $605 million Houston-based Texas Bay Credit Union, which serves more than 52,000 members. In the first quarter of 2022, for example, 122 members received a loan application through Auto Link and 92 of those members received a loan.
Texas Bay Credit Union’s vice president of marketing and business development Charlotte Yocom noted that the Auto Link solution also has ancillary benefits.
“You might not get the auto loan today, but maybe you get the mortgage, or their deposits or a CD,” Yocom said. “You show that you’re in it for the journey.”
When asked what advice Harrington would provide another credit union seeking a similar solution, he responded: “Ensure all stakeholders are in the initial meeting including Auto Link and the credit union’s marketing team. Marketing to the credit union membership in a fun and positive way is critical. Additionally, offering a rate concession or monetary incentive for using the car sale and financing through the credit union helps.”
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