LAS VEGAS – Forget the stereotypical image of Hispanic consumers only being able or wanting to buy low- to mid-end, domestic vehicles. The average U.S. Hispanic is not only buying high-ticket vehicles, but their purchasing power is projected to grow three times as fast as the total population.
Data like that represent a ripe opportunity for credit unions to gain the trust of this growing segment of the U.S. population and provide them auto loans and other financial services, says Sara Hasson, vice president, automotive marketing for Univision Television Group, a leading national Spanish language television and radio broadcasting company.
Still, while Hispanics currently represent 14% of the U.S. total population, they have very limited access to information on financial services. According to Hasson, only 2.1% of all U.S. financial services advertising efforts are dedicated towards Hispanics, and the financial services category represents only 3.4% of all Spanish language advertising efforts.
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Speaking on "Understanding the Hispanic Marketplace" at the CU Direct 2006 Annual Symposium, Hasson shared other key demographic statistics about the U.S. Hispanic population with her audience. Among the eye-opening numbers she cited-one out of every seven U.S. residents are now Hispanic; the Hispanic population is increasing seven times faster than the non-Hispanic population; the U.S. Hispanic disposable income increased by 52% since 2005.
What's more, Hasson said the top 10 Hispanic population growth markets will experience "explosive" growth from 2006-2011. The markets include: Ft. Myers, Fla.; Atlanta; Ft. Smith, Ark.; Nashville, Tenn.; Las Vegas; Orlando, Fla.; Charleston, S.C.; Indianapolis; Raleigh, N.C.; Tampa, Fla.; and Washington, D.C.
With J.D. Power projecting Hispanic auto sales will grow 29% in this decade, Hasson encouraged credit unions to work with their communities to serve the Hispanic market.
"The Hispanic market is a ripe opportunity for you to serve," said Hasson, and she underscored her point by continuing to cite valuable auto sale information on the Hispanic market.
For example, new vehicle sales to U.S. Hispanics increased 10% from 2000-2005-sales to Western region Hispanics increased 16% in that time-while new vehicle sales to U.S. non-Hispanics declined 13% over that period.
In 2005, Western region Hispanics spent $14.2 billion on the more than 556,000 new vehicles they purchased, and full-size pickups and utilities and SUVs represent 65% of truck sales to U.S. Hispanics. In fact, U.S. Hispanics spent over $6.2 billion on trucks priced $30,000-$50,000 in 2005.
What that all means, said Hasson, is "dealers and lenders must be aware of their Hispanic customers' credit habits and knowledge." Among those habits, she said, large down payments are common; monthly payment may be more important than total price; they may not know how a credit rating is established and they may incorrectly say they have no credit history; a credit check may be considered a commitment to purchase; and they may rely on co-signers to qualify for a loan.
At the same time, though, she said Hispanics want more customized financial products and services. U.S. Hispanics "dramatically" under index non-Hispanics in usage of all financial services. -
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