There's no exact countbut when it comes to used car lots, AutoBranch may be one of thevery few owned by a credit union.

The $414 million City County Credit Union in Margate, Fla.,launched the business in 2004 and today, the lot (pictured at left)sells 40 to 50 cars a month, according to Lloyd Gill, president/CEOof the cooperative. In 2013, 489 cars were sold compared to 404 inthe lot's first year.

Drive down busy S. Federal Highway in Fort Lauderdale, Fla., andAutoBranch will stand out because it doesn't resemble the typicalused car lot with a “Buy Here, Pay Here” banner flapping in thebreeze. The location was formerly a new car dealership and thebuilding looks clean and inviting and the lot is orderly.

“The venture is profitable,” Gill said. “We sell a lot ofextended warranties, GAP and credit life disability. We sellwarranties and GAP with a penetration rate of about 90%, and creditlife/disability (at) about 50%.”

AutoBranch also offers a sub-prime auto loan program thataccounts for 20% to 25% of the vehicles sold.

“It helps a lot of members,” Gill said.

Nearly 2.4 million cars were sold at more than 33,000 “Buy Here,Pay Here” lots nationwide in 2010, the latest year tracked by CNWMarketing Research. It's estimated that the dealers make roughly$80 million in loans each year.

When AutoBranch opened, the credit union noticed an immediatejump in used car loan volume, Gill said, attributing the hike toincremental new volume. According to Sandra Spence, City County CUvice president of advertising and public relations, the creditunion does not finance all the cars sold and reposessions arerare.

City County CU touted several reasons to shop at AutoBranchincluding that the vehicles are ASE certified, have passed a 160point check of key components and each auto comes with a freeCarfax report. There's also a free car locator service for thosenot on the lot. In addition, AutoBranch offers a free car transportservice and will bring the vehicle to the buyer. There's a pricematch guarantee: If someone else has a lower price on the samevehicle, AutoBranch will meet it, according to the credit union.The lot also promises personal attention and employees who care.For those who actually purchase a vehicle, they will receive a $25gas card.

Read more: How City County found success…

The dealership is“modern and new and looks very nice. It's not a small lot with atrailer on it. It's a high-end looking operation,” Gilldescribed.

Having served as president/CEO of City County CU for the pastfour years, he said his predecessor, Bill Marquardt, had the visionto open AutoBranch. The idea was credit unions had been fightingdealers for control of the car loan, Gill explained. So why didn'tCity County CU become its own dealer and provide members with abetter experience?

The credit union talked to Florida officials and learned thestate did not want it to hold a dealer license, Gill said. So,AutoBranch operates with a dealer tenant. It appears seamless tothe member, even though the salespeople are employees of anindependent used car dealership working under an operatingagreement with the credit union. But when it comes to financing,City County CU has its own staff on site.

“You don't have to be a credit union member to shop there. Ifyou're not a member, you can join because we have a field ofmembership that allows anyone who lives or works in 43 counties tojoin,” Gill said. “The business concept is we try to provide allthe financing and do the best direct auto loan the way it would bethrough a branch,” he added. “So, someone who comes in there, getsthe same interest rate on the loan they would get if they appliedthrough one of our branches or our call center. The member isn'tpaying a marked-up rate.”

Gill doesn't have statistics on how many new members decidedCity County CU was a good deal and opened a checking account orotherwise expanded their relationship. Still, staff is on hand atthe used car dealership to handle cross-sell credit cards and otherproducts and services, he said.

If all this sounds easy, Gill stressed the car business is adifficult operation because you're selling cars, not just financingthem. When there's a problem, customers come back with mechanicaland other issues and they have a higher level of expectation thanthey would of a typical dealership.

“It's a great service to provide, and it's very profitable forus. But it's more work to manage than people would assume. It takesa lot of ongoing hours,” Gill explained. “We have to spend timeworking with people on the dealer side of the business. A lot of itgets very operational in nature – inventory level, the price ofcars, reconditioning of cars. There's a big difference betweenfinancing the car and selling the car.”