Consumer interest in buying cars online isflourishing, and one credit union's plan to capitalize on thattrend is highlighting just how much the internet is changingthe way credit unions operate in the digitalera.

Earlier this month, Orlando, Florida-basedFairwinds Credit Union announced it now offers member financing tocustomers of Carvana, a Phoenix-based e-commerce company that buysand sells used cars online. Carvana allows customers to filterthrough its inventory online, inspect cars via 360-degree photos,complete purchases electronically and have cars delivered to theirhomes or made available for pickup at one of the company's five“vending machine” sites around the country. The company completeda $225 million IPO in April.

The partnership, which Fairwinds SeniorExecutive Vice President and Chief Lending Officer Jim Adamczyksaid was a few months in the making, reflects a noticeable trend in the automotiveindustry — one that can be lucrative for technologically adeptcredit unions.

“We certainly have the experience where youcould go to a dealership, and we've got great dealershiprelationships. We have a car concierge that will go find that carthat you want, and whatnot. But we didn't have anything that wastruly digital — all online — and that's what we were looking for,”he said. “It fit in well with our strategy.”

The idea is to speak to members who are tiredof traditional car-buying transactions, which often requirevisiting a branch for preapproval, then driving to a dealership toshop, Adamczyk said.

According to a November 2016 study byCapgemini Consulting, many people are indeed open to change: about60% of Americans and 77% of Chinese and German consumers in thestudy said they were now willing to buy a new car online. Almosthalf (47%) of the Americans in the study said they think buying acar online will get them a discount, and 35% said technologicalcooperation with banks would increase their willingness to buy acar online.

“Given that so many customers have a hungerfor a holistic online purchasing experience, including financecontracts, inspection packages, insurance, other add-ons, and lesspaperwork,” the study noted, “this begs the following question:when will this become just another channel to market, a mainstreamway of selling cars?”

For Fairwinds, which has $2.2 billion inassets and about 179,000 members, that time apparently is now.Adamczyk said members can still call the credit union to getpre-approved, and then the credit union makes Carvana aware thatthe customer is a pre-approved member. The paperwork is done viaDocuSign so that members never have to come to a branch or set footon a car lot.

“Literally, they could sit on the couch,watching TV, using their phones, search for a car, pick the carthey want, and then we could send the documents and they could signon their phone. It really is a true digital loan experience,” hesaid.

In addition to capturing more auto loanbusiness from digitally inclined car buyers, Fairwinds saves moneyby not having to pay dealer fees for Carvana transactions, Adamczyknoted. It also gets an opportunity to cross-sell, he said.

“The insurance and protection products thatthe member purchases, they're purchasing through a credit union andthey don't have to worry about some dealership selling thoseproducts as well. From a credit union perspective, that makes thecar all that more profitable for the organization,” he added.

The bigger competitive advantage, however, maybe the buying experience.

“My advice is to let a member buy a car howthey want to buy a car,” Adamczyk explained. “It's not our job totell them they have to buy it this way. Our job is to help themfind the best avenue that suits their buying needs, and thenprovide them the easiest financing source that's available. And so[credit unions] really need to think through what it is they wanttheir members to experience.”