Auto bad credit direct loan

Internet auto sellers target members for life

Credit unions now face the biggest threat and biggest opportunity ever in the auto lending arena. Both the threat and opportunny are completely Internet-driven.

Virtually overnight, competitors for your members' auto loans have morphed into much more dangerous and complex creatures. You used to worry about auto dealerships or local banks taking your members. But now, a stunning series of mergers, "affinity relationships," and "allied partnerships" have brought some of the most sophisticated, powerful technology companies and international conglomerates into the auto-loan field.

Everyone wants a piece of the autoloan business now:

Ford Motor Co, has announced a "strategic alliance" with Yahoo!-a Web search engine with millions of visitors. Yahoo! will push Ford products, including financing.

General Motors Corp. has announced a strategic alliance with America Online (AOL)-the world's largest Internet service provider-to push GM products and financing. In the same week, GM also announced it had formed another strategic alliance-with Sears, Roebuck & Co. Do any of your members own a Sears credit card? Coming soon, that card will lead them directly to a preapproved auto loan.

Toyota-the world's third-largest auto maker-did Ford and GM one better: It formed a "members-only shopping bazaar" with its own direct-issue credit card, giving users a direct avenue to an auto loan.

CarMax-owned by Circuit City-announced an "affinity partnership" with eBay, the gigantic online trading service. Then it announced a deal with banking giant Wells Fargo. The list of new auto-loan providers goes on for pages.

And none of them mention the word "credit union" when they talk about financing. Credit unions don't exist as an option in their world. Did I mention virtually all of these newly morphed, highly sophisticated, big-budget players offer your members loan approval usually within 30 seconds, and a check overnight?

And I haven't told you the really bad news yet. Even if they don't make your member a loan today, they still want a lifetime relationship with your member, starting today.

"We'll work together to assist consumers throughout the entire ownership cycle," even though the owner may not drive a GM vehicle, says a GM release.

And AOL's "personalized destination" includes "My Calendar," which helps consumers "maintain a comprehensive car ownership experience" with GM and its dealers. "My calendar" will send a member an e-mail when the member's car needs service, distribute timely auto articles, and generally become the member's online auto friend for life.

That's a powerful, seductive weapon. All of these players are trying to co-opt your relationships with members.

Credit unions have members' best interests at heart. Do you really think an auto manufacturer's site will say when a vehicle receives a bad safety or performance rating?

Regrettably, it doesn't matter if the promise of a "lifetime relationship" rings hollow to us. It will ring true to members. And there already listening. In 1999, 60% of all car buyers used the Internet in some manner to research their purchases. Virtually every one of those people is now "nailed"-placed in a database belonging to one of the new finance players. And many of those people are credit union members.

How will you compete in this new battle for members' loans? You have to compete or you'll be gone. Smart credit unions can beat the competition. We'll talk about how next time.

REMAR SUTTON is an Atlanta-based consultant and author.