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to you and shop for a car before they go to the dealership,” says Jacobson. “Once they go to the dealership, the dealership is going to put them through somebody else’s financing.” Most often, that is a captive finance company or a large bank. At the moment, the GrooveCar Direct program works with about 200 credit

Leasing, enables credit unions to offer leases through dealerships. Credit unions handle the lease payments and the credit risk, and CU Xpress Lease takes care of the rest, including the residual risk, setting up lease deals, and managing the relationships with the dealerships. TrueCar, another web-based car buying service that connects with a broad network of dealers, also works w ith credit unions as a NAFCU partner. With programs like these, Celent’s Meara sees opportunities for banks to move past their traditional approach. “Rather than selling a product and product attributes and hoping you do that at the right time, why not be involved in helping your customers/members actually get what they’re after?” he says. “If you do that, you’ll be much more likely to win the business that you provide.” Opportunity is ripe. Aside from USAA Federal Savings Bank’s online car buying service, where members can shop for cars and apply for an auto loan, bank programs that rope in buyers early in the car buying process are pretty nonexistent. “Because it’s fairly distinctive now, it’s probably a great time to jump on,” says Meara. He also urges banks to consider what else they can offer around car loans. For example, USAA also offers its members auto insurance. “Being a one-stop shop for their members,” says Meara, “is really useful customer engagement.”

unions, and the goal is to sign up 400 more by the end of this year. Some of the credit unions go on to take part in GrooveCar’s other programs, including indirect lending, which allows members to finance through their credit unions right at the dealerships. GrooveCar’s leasing segment, CU Xpress

Avg. loan & lease terms (mos.)

Risk distribution of open loan balances 4.28%

2016 Q3




New loan Q3 2015






New lease Q3 2016

Deep subprime




Super prime

February/March 2017



Profile for Banking Exchange

February/March 2017 Banking Exchange  

February/March 2017 Banking Exchange