WASHINGTON – With the Internet affecting virtually every part of consumers’ daily lives and buying habits, it’s little wonder the technology is playing an increasingly larger role in the auto buying process, from researching vehicles through to the actual purchase. That’s why it’s important that credit unions leverage online auto buying tools and vehicle purchasing services to grow their auto loan portfolios and market share. How large a market is online auto shopping and research? Callahan and Associates examined it closely in a Webinar on June 30. Joining in on the Webinar were: Bill Eveline, president, National Buyers Federation; Mike Federoff, director product sales, Credit Union Direct Lending; and Chris Andrus, AVP of Auto Expert, a wholly-owned auto buying CUSO of Riverside County’s CU.Twenty-six credit unions also participated in the event. Answering his own question, Callahan’s Senior Industry Analyst John Marron offered the following data for participants to consider: more than 5% of all Web searches are for researching and purchasing vehicles; auto sites get more than 60 million hits per month; more than 62% of all new car buyers used the Internet; and approximately 25% of all auto site visitors buy a car within three months. What that means, said Marron, is that with consumers’ online auto purchasing options increasing and becoming more important, credit unions must make sure their Web site is well-designed and easy to navigate if they expect to remain competitive in the auto buying market. Marron reinforced his advice by citing some statistics from Genex, an Internet development and consulting firm – nearly 65% of consumers said they won’t patronize a poorly designed site; more than 30% said that Web site design is more important than a great product; and about 30% said they would stop buying from their favorite offline stores if their online shopping experience is poor. There are various online auto buying services designed expressly for credit unions that are available to them. The National Buyers Federation’s CarQuotes is a credit union auto buying service that’s worked with about 95% of credit unions in the Chicago area for more than 25 years. It includes a complete vehicle purchasing and research center for CUs and their members. The CarQuotes’ Web site – www.carquotes.com – is uniquely branded for each CU. The NBF describes the objectives of CarQuotes as: identifying potential auto-loan prospects to increase CU loan volume; increase cross-selling opportunities; increase member retention; attract new members; increase credit unions’ overall Web site traffic. Eveline warns credit unions to beware of links to the Web sites to sources such as Kelly Blue Book, North America Dealers Association (NADA) Guides, CarFax and other online lenders such as E-Loan. They are your competitors, he says, for auto information and loan financing. CUDL’s Federoff says the company’s online auto buying program – cudirect.com – gets 55,000 unique visitors each month, and more than one million hits a month. It expects that to increase in September when CUDL’s redesigned Web site becomes available. New features will include vehicle inventory information, reviews, rebate information, and road test and safety data. “Basically everything a member wants to know about a vehicle before they buy it,” he says. Other enhancements will include features such as a link to credit union rates and online loan applications; credit report education and information; robust vehicle configuration; and co-branding. “It’s very important to keep the member on the CUDL site so they don’t go anywhere else for information,” says Federoff, adding that any credit union will be able to use the Web site as their own, even in markets where CUDL isn’t operative yet. Lastly, Riverside County’s CU’s Auto Expert works with seven local CUs and offers them free auto buying services. Andrus says the CUSO currently brokers about 150 cars each month. The process is simple for the member, says Andrus, because Auto Expert handles all the issues involved with purchasing a new vehicle: members phone, email or come to a CU branch; the Auto Expert advisor talks with them about the vehicle they have in mind; the advisor locates the vehicle and works with the member’s CU lending team for the financing; the member comes to a convenient branch of their CU and takes delivery of their vehicle in less than 30 minutes. The idea, says Andrus, is members never have to set foot on a car lot. -

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