Does Your Credit Union Need More Vehicle Loans?

OK, who doesn’t?  With relentless competition from the auto dealers and other competitors, it’s harder than ever to gain vehicle loans.  But here’s a tip that could help you and your front line team build a member relationship that will endear you to them while at the same time, help capture more loans.


Work from the savings side:

That’s right, work from the savings side.  It starts with a DREAM.  When your MSR or lender open a new account, or when closing a loan for a member, strike up a conversation with the member about savings goals.  “Is there anything at all that you would love to save for?  A family vacation that you’ve always wanted?  Christmas without the debt and the guilt?  Down payment on a home or a loved one’s education?  Or even just some emergency money for peace of mind?” Spend time talking about it with the member and learn their dream.


Then ask some simple questions:

  • “How much would you need for that, realistically?”  or  “How much did you spend on Christmas last year?”
  • “By when would you like to have that set-aside?”  Get the exact year and month.  Narrow it down.  That’s the term.
  • “How often are you or your spouse paid?”  Look for bi-weekly or weekly if possible.  You want to figure out the total number of pay periods until the end of their term.
  • “OK.  Let’s do the math together.”


Now it’s just a simple math problem:

For example, suppose Mary wants to have $1,000 for Christmas by December 15th next year.  That’s 26 pay periods in the year. If she is paid bi-weekly, then it’s $1,000 / 26 pay periods of $38.46  per payroll.   Ask her how realistic that is, and if she says it’s not, then find out how much WOULD be each pay period, and multiply it back by the TERM to get the amount she would save or divide that lower amount into the total Dream goal to figure out how much longer she would have to wait.


Now for the LOAN part:

“Want me to help you find some free money toward that goal?”  I have asked this question many times to the wonderment of the member who typically asks “What’s the catch?”  To which I reply, “Tell me about the loans you have elsewhere.  Like car loans, a mortgage, or credit card debt that you want to get rid of.  Maybe we can refinance them for you and add to your savings goal!  Do you have any of them?  Let’s see if you qualify!”  And direct deposit makes both the savings effort and the LOAN payment automatic.


If your new accounts and lenders do this, then they are leveraging the member’s initial request while at the same time showing genuine care and concern for their member.  If they don’t, then they are just plain missing out on some fantastic opportunities to build thrift, and instead just doing their job.  Find a way to help them get this done and watch your long-term relationships blossom into more loans and member referrals!

Written by:

[author] [author_image timthumb=’on’][/author_image] [author_info] Joe Schmitz – President & CEO of Cherry Creek Financial Services. Former Compliance Manager with the Wisconsin Credit Union League, loan officer and director of fee income for a $3 billion financial institution. [/author_info] [/author]