There's good news in early 2003 for consumers looking to buy automobiles. New-car inventories are very high, and dealers will continue using splashy promotions highlighting price cuts, coupled with low financing, to lure consumers onto their lots. There's never been a better time for credit unions to seize on the momentum and offer some new financing promotions of their own. During this traditionally slow time for car sales, automobile manufacturers and local used-car lots will be promoting rebates, zero percent (or otherwise very low) financing, "forgiven payments," low-cash down and gimmicky incentives for purchasing. This might indeed be the time to buy, and the right time for your credit union to capture a big share of the financing market. As your members' trustworthy financing friend, there is plenty your credit union can offer. You can become the `first stop' for those members considering a car purchase. Help them compare prices, decide on buying vs. leasing, and explore a financing method that makes sense for them. But before you promote yourself too broadly, take a look at your MCIF data and determine who is likely to make a car purchase. Do proactive and consistent database marketing such as mirror marketing, auto loans near pay-off, and new drivers in the household. Once you determine your target segment, match your offering to what they see as a benefit. Younger members want the flexibility of 24×7 access via a call center or Web site, while an older target market values the face-to-face relationship. Remember, don't just launch an advertisement to the masses. It's better to target specific members, and, it's best to have unique messages going to different age groups. That is, you might not want to use photos of SUVs or mini-vans in your mailings to 20- and 30-year-old members who prefer hot little two-seaters. In addition, for reasons of convenience, ease and accessibility, offering loan information and applications 24×7 through call center support and a Web site promises to be at the cutting edge of credit union lending in 2003, and beyond. Multiple delivery channels and access at the member's convenience is becoming as important as the loan itself. Your tellers and MSRs are just as important as your promotions: Coach them to cross-sell your automobile loans. Here are other on-ramps to help you get in on the action as we head into 2003: * Accelerate your indirect auto lending with local dealers. Only about 42% of credit unions with more than $50 million in assets have such a program. Take a dealer to dinner and work on a plan to get a program rolling. If you have indirect in place, ramp it up. Credit unions using indirect only have about one-third of their loans coming in through this channel. The growth potential is there. * The financial press says automobile manufacturers are losing trunkfuls of money by financing car buyers' purchases, so they will be further tightening the qualification rules. If the predicted slow but steady economic recovery is on track, interest rates will undoubtedly rise. Also, urge your members to get their loan approval before they go to the dealer. That way there will be no expensive add-ons, no surprises with interest rates or terms, and a reasonable cost on credit insurance protection from a reputable carrier. * Recapture lost auto loans through a monthly direct-mail program to pre-qualified existing or potential members who recently financed an auto loan through another financial institution. And, as part of any direct-mail campaign, follow-up with phone calls. Response rates have been known to double with a well-timed service call. * Help members shop. Have bluebooks available in your lobby and link your Web site to some of the Internet car-buying research services. * Educate your members. Not all buyers qualify for the zero or near-zero percent financing, and some "cash back" must be spent toward optional equipment. * Rev up your Internet lending because this delivery channel will grow. CUNA Mutual's Lending Lab research shows that in 2002, 18% of consumer loan apps were taken from the Internet – that's up from 12% in 2000. In 2001, 66% of credit unions were using the Internet to make loans. Of those not using this channel, one-third said they were going to begin using it within a year. * Call or write members whose loans are nearly paid off and pitch a new one. * Use members' credit reports as an insight into their financial needs. Perhaps a consolidation loan or home equity would be best. Show them how these options save them money. Present yourself as a financial advisor. They can't get that at an auto dealership. * Applying for an auto loan should be no more than one click off your homepage. Use electronic forms and filing instead of requiring members to print and mail or drive them in. * Reach out to members with less-than-perfect credit, offering credit counseling to get them to qualify. You will find this target segment extremely loyal to your credit union down the road. * Coach tellers to use a catchy slogan such as "we're running a special low interest rate on new and used car loans and you qualify!" Get your members talking about their finances and offer to help. Have your staff pin $50 bills to their lapels. When members ask about it, reply that you're giving away $50 to every member who takes out a new-car loan. In other words, maximize your member interactions with a consistent consultative approach assessment at the account opening or during service opportunities. At every interaction, ask the member, "Are you planning any major purchases over the next six months?" * Offer an open-end loan, packaged with customized products (debit/ATM/credit cards, checks, Internet banking, etc.). * Leverage an auto loan campaign by tying together your entire marketing channel, and make sure your message is consistent at every touchpoint. Your unique message should be the same whether it's communicated through the teller line, statement stuffers, or on your Web site. * When new members are signed up, introduce them to a loan officer and include loan information in their orientation materials. You can effectively market with messages targeted to your members most likely to borrow. It takes some effort to identify them, then offer the right message. Done correctly, automobile lending can be a positive lending experience, strengthen your relationships, and add some shine to your bottom line well beyond 2003.