SAN FRANCISCO — Sitting atop their multistoried booth at the National Automobile Dealers Association conference here in mid-February, CUDL President/CEO Tony Boutelle and Executive Vice President Jerry Neeman surveyed the traffic below and glanced across the cavernous exhibit hall at the Moscone Center.
Neeman was visibly weary from back-to-back meetings with dealer groups in the usual time-frenzied, compact schedule that major conferences afford. (NADA is the largest auto dealer event in the country and averages over 25,000 attendees.) “I’ve met with AutoNation, Sonic and Group One,” he said. “This is a big opportunity for us here to spread the word, so we make the most of it while we can.” These large dealers have become aware of the indirect credit union financing option that CUDL presents, and they are interested, he said.
Boutelle had been kept busy meeting with CU clients and groups, too, he said. “What’s of great interest to credit unions is that 40% of CUDL loans at dealerships are to people who are already credit union members. We capture them at the point-of-sale.” Credit unions that work the indirect option effectively do very well with it, even reasserting the value of membership, he said. “CUDL is about being where your members are. If they don’t come to the credit union first, the CUDL system offers a good way to regain the car loan.”
Of the oft-heard complaint that indirect members do not usually become full-fledged CU service users, Boutelle could only say that converting consumers into dedicated CU members was beyond the CUDL purpose, but it’s a good start. “It starts with the transactional opportunity and then is best carried out through member education and, face it, good communication and contact,” he said. Overall, a CU that worries about converting indirect buyers is still challenged with making its present membership multiple-product users, said Boutelle. “Consumers who come to a dealership come to buy a car, not join a credit union.” But the option to convert is still there if credit unions work it.
The CUDL University (www.cuu.com) powered by Harland offers plenty of help, he added. The CUDL University program was introduced in June 2005 to provide a range of educational computer-based tutorials and customized courses on topics such as back office processing, collection strategies, profitability, risk management and more. There are more than 125 industry-oriented courses.
CUDL has been nurturing the NADA resource to increase the awareness of credit unions with auto dealerships, said Neeman. This is the fifth consecutive year that CUDL has exhibited at NADA, and each year brings greater interest, he said.
“CUDL’s presence, along with our credit union partners, at the NADA Conference over the last four years has helped to significantly increase industry awareness of the benefits of partnering with credit unions,” said Boutelle. “Our continued goal at NADA is to build upon that awareness and strengthen the growing relationship between credit unions and dealers.”
Boutelle admitted that times were tough. “Everybody’s hurting,” he said. But CUDL has access to industry statistics and deep data that can help credit unions. “We can analyze everything about a credit union’s marketplace and then help them define a sales strategy that affords a good chance of success. Once they decide on a course of action, we can implement it for them.”
The current breakdown of who gets what business shows: 22% to finance companies, 35% to banks, 25% to captives (manufacturers) and 18% to credit unions. “We can give CUs qualified intelligence that will let them better compete with banks,” said Neeman.
The finance companies penetrated the subprime market “and that D&E paper hurt them,” Boutelle said. “But credit unions have been pretty steady and have a better spread on risk to show for it. So there’s an opportunity for credit unions to take advantage of that correction at the finance companies and regional banks.”
“At CUDL we want to be a credit union’s business partner and dealers love us. Dealers just want to sell cars, but we look out for a CU’s best interests as well,” said Neeman. “And we think we can do that best because we provide a credit union-owned delivery channel. We see that as a long-term benefit, to be a part of a CU cooperative in the CU world where we control costs and our own destiny.”