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ORLANDO, Fla. – The car buying experience continues to be a frustrating, confusing and harrowing experience for most consumers who dread the idea of facing dealers and haggling over prices. Online technologies and vehicle buying services have helped some buyers circumvent the unpleasant experience. AutoAdvisors Services LLC, d/b/a AutoAdvisors has taken the process one step further for credit unions by providing credit union members a haggle and hassle-free car buying experience at low, competitive prices while insuring each vehicle loan remains with the credit union. Founded in November 1995 by principals Bill Goldberg and Steve Pescatore, the company became a limited liability corporation in January 1999. Its first credit union relationship came in May 1997 with Martin FCU, Orlando. The company’s client base continues to be credit unions in Florida and North Carolina. “We’ve been invited to do business with credit unions in California, Texas and New Jersey. But this is a very hands-on, intense, member service program, and Steve and I feel that even though we have four other full-time managers, our management team would be stretched too thin if we expanded into those states,” Goldberg explains. Goldberg and Pescatore’s relationship predates their formation of AutoAdvisors’ founding by some 11 years. The two met in Frankfurt, Germany when they both worked for the House Armed Services Committee-mandated Overseas Military Sales Corp., which was the sole distributor of General Motors, Ford and Chrysler consumer vehicles to the U.S. military overseas. Goldberg explained that Germany was divided into regions among five credit unions – Pentagon FCU, Andrews FCU, Services FCU, Finance Center FCU, and Navy FCU – which provided financing to service men and women to buy vehicles overseas and state-side. Both Goldberg and Pescatore returned to the states in 1988, and Goldberg continued to work for Overseas Military Sales Corp. He explained that the company was approached by former Pentagon FCU President/CEO Ron Snellings about setting up a state-side new and used auto buying program for Pentagon members. Goldberg came up with a program called Priority Assist which featured the company putting staff at the credit union to help members through the car buying process including helping them determine what vehicle to buy, getting them pre-approved, working with the dealers and negotiating for the member. When the process was finished the member only had to go to the dealership and pick the vehicle up, Goldberg says. Goldberg left Overseas Military Sales Corp. in November 1995 to form his own company, and Pescatore joined him in that endeavor which became AutoAdvisors. “What most members want most when buying a vehicle is to avoid the haggling and hassle at the dealership,” Goldberg says. “They want to be educated and understand what’s happening to them, their greatest fear is of the unknown and not understanding what’s going on. We send them with our contact to the dealership, so there’s no dance and no two-to-three hour ritual of the dealer and member getting to know each other.” Goldberg says 70% of the time an AutoAdvisors representative accompanies a member to the dealership. “That’s what differentiates us from others in the business,” he says. AutoAdvisors currently has relations with 22 credit unions representing over 730,000 members in Florida and North Carolina, and although Goldberg and Pescatore’s roots were with credit unions that serve the military, only one of the company’s current credit union clients is military – Fort Bragg FCU. In 2004, AutoAdvisors did over $160 million in direct loans, up from $130 million it did the previous year. Cognizant of the growth of indirect lending among credit unions as a portion of their auto loan portfolio, Goldberg says, “A direct loan is a better loan-to-value than an indirect loan. Most indirect loans are between 115% and 120% LTV, but with our program the LTV is between 90%-95%. It’s not only a better loan for the credit union but also for the member.” Another advantage Goldberg says direct lending has over indirect is that direct lending “speaks directly to credit unions most loyal members.” He explains that, “If a non-member goes to a dealership to buy a vehicle and the dealer learns they can put them with XYZ credit union to get a loan, the buyer becomes a member of the credit union but has no affinity or loyalty to it. They’ve become a member because of the dealer. If you just pick up incremental membership, that doesn’t strengthen your membership. In some cases, in fact, these members have never stepped foot in a credit union.” Goldberg stresses that AutoAdvisors doesn’t buy or sell vehicles, “so we can be totally unbiased in our advice.” The company’s objective, he explains, “is to educate credit union members on the nuances of new or used vehicle purchases and to encourage them to finance with their credit union.” AutoAdvisors also encourages members to purchase additional products such as GAP insurance or extended warranties through their credit union. “Our concern is the entire financial transaction, not just the selling price of the car,” says Goldberg. -

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