In 1994 a conglomerate of credit unions in central Kentucky approached Jack Kain Ford dealerships about credit union financing. The credit unions wanted to start offering financing to their members and potential new members through the dealership. They understood the enormity of the auto loan market, and they knew that most consumers were turning to their local dealer when financing their vehicle. The Kentucky example is not unusual. The fact is that more and more credit unions are courting auto dealers, and that is expected to continue. More than 1,300 credit unions now offer financing through dealerships. This has helped credit unions gain market share in auto financing. In 1993, credit unions accounted for 4% of the total auto loan market. Ten years later, credit unions held 10% of that market, according to CUNA. When credit unions offer financing to their members through local dealerships, they give members something they count on: one-stop shopping. Today's consumers are well-informed and not shy about searching for the best deal. They prefer going to someone they know and trust when making a major purchase like a vehicle. Almost 75% of dealerships have been landmarks in their community for over a decade. They have an established relationship with their customers; they focus on quality customer service, and the result is repeat business. In today's financing arena, credit unions have found that the best way to compete is to have a healthy mix of auto loans. Credit unions can keep their overhead low by taking advantage of approximately 21,600 already-established dealership locations in every community in the country. In effect, the dealership becomes another retail outlet for the credit union. For those members who are not willing to take the time to go back and forth from their credit union to their dealership, they can count on financing at the dealership. Convenience is becoming increasingly important to people now, so the fact that credit union members can apply for auto financing right where they wish to buy a car, means their credit unions are providing them with a valuable service by giving them that option. Credit Union Direct Corp. has recognized that credit unions with a presence at dealerships provide members with an extra level of convenience and customer care by being accessible after hours and on weekends, when many people go car shopping. Whether the financing is acquired at the dealership or credit union, members will receive the same rate and terms through both channels. Dealers are eager to work with multiple financing sources so they can offer more options to their customers in a very competitive market. Some dealers even display the credit union logo on their showroom doors and in their newspaper advertising. The logos serve as reminders that members can get credit union rates at that dealership. And it's not a one-way street. Credit unions also market dealerships to their members. These credit unions can choose to supply selected auto dealers with their membership forms so that non-members living in that community can become members right at those dealerships when they buy a car. Such incremental business comes directly from the relationship between the dealership and the credit union. The relationship is also a no-lose situation for consumers. * Consumers benefit from a competitive market that makes auto credit plentiful and affordable. * Dealers have access to more financing sources and can offer low rates because they deal in such volume (more than 60 million transactions a year). * Dealers offer the convenience of one-stop shopping through approximately 21,600 retail locations. But the challenge is to raise consumer awareness about the complexities and benefits of the auto lending market. The fact is, the state of financial education in this country can be improved, especially among young people. This is why dealers are working diligently to inform the public about auto financing through the NADA Financial Literacy Campaign. One example: NADA has joined with Junior Achievement in support of a financial literacy program aimed at middle-grade students nationwide. Dealers go into the classroom to share their own business experiences and focus on understanding how cars are financed. Another example: For the past two years, NADA has published consumer tips on car buying and auto financing in a special section of Time magazine. With over four million readers, Time is an important part of NADA's financial literacy efforts. Dealer financing offers the consumer many benefits, not the least of which is the convenience of one-stop shopping. With dealer financing providing crossroads for cooperation between credit unions and dealers, we are in a stronger position to achieve our common goal; to better serve America's consumers.