GrooveCar recently highlighted that its auto leasing program for credit unions, CU Xpress Lease, produced a 39-percent year-over-year volume increase during the first quarter.
The growth comes after CU Xpress Lease funded nearly $1 billion in lease volume for 2016.
The first quarter will break vehicle leasing records for credit unions, according to Callahan & Associates, which added that these institutions are experiencing the fastest 12-month share growth rate in 14 years and the third year of double-digit growth.
The firm added that credit unions nationally witnessed new and used auto finance portfolio growth, up by 34.6 percent in Q1, compared to the same span in 2016.
A GrooveCar partner, Teachers Federal Credit Union, headquartered on Long Island with assets of $5 billion, is exceeding the national trend, reporting lease volumes have increased significantly in the last year. In 2016, auto lease volumes were up by 33 percent versus 2015 numbers; in 2017 Q1 volume is up 85 percent.
The success, according to Teachers, is driven by lower money factor rates coupled with competitive residual values.
“Long Island credit unions are making an impact and are now taking business away from captive lenders and banks. This is a profit changer. CU Xpress Lease offers credit unions a means to be competitive at all stages of the auto buying process,” said Frank Rinaudo, senior vice president of GrooveCar’s CU Xpress Lease.
Regional growth for the program is attributed to continued popularity of leasing versus traditional financing. The program continues to drive volume for credit unions and increased sales for Long Island auto dealerships where 90 percent of the franchised dealerships participate in the GrooveCar program.
“We are thrilled to provide a leasing solution where credit unions and our preferred dealers, here on Long Island, can do some serious business together,” Rinaudo said.
Francis Collins, senior vice president of credit, Teachers Federal Credit Union, also located in Hauppauge, N.Y., agreed.
“The leasing program has been a main driver behind our significant auto loan growth in 2016 and now into 2017. Members are benefiting from the program through low rates and great service at origination and lease termination,” Collins said.
The CU Xpress Lease program can provide a solution for credit unions and their members to participate in leasing on Long Island. Providing a program for consumers allows credit unions and dealerships to do more business together, given nearly 70 percent of all new vehicles sold are through the lease channel.
Robert Kravetz, general sales manager for Huntington Jeep Chrysler Dodge, located on Long Island, reports at his dealership the number of leases is actually higher.
“We are seeing 75 percent to 85 percent of our business through leasing. Of that number, 70 percent of all leases are going through credit unions because the programs work well for the consumer and the dealership,” Kravetz said.
Officials say the Long Island market offers perfect demographics for auto lease growth. There is a strong employment market for a range of age groups who prefer this method of financing.
“We are seeing members of all ages partaking in leasing, many of whom are taking out their second and third lease with TFCU,” Collins said.
Auto leasing relies on residual values of the vehicle; predicting what the car is going to be worth at the termination of the lease.
“Offering low mileage leases, the CUXL program provides flexible mileage options as low as 7,500 miles a year; this keeps the values high,” Rinaudo said, “The combination of the two allows us to provide great lease specials through the credit unions for area dealerships to attract customers. It’s a great situation for both parties.”
In addition to Long Island, GrooveCar’s CU Xpress Lease is a national program that serves credit unions throughout the nation, with sales representatives and support staff to assist credit unions in managing all aspects of the program. The program has been in operation for over a decade with many lease cycles that have made credit unions on the program 100 percent whole when each cycle ends.
To help generate even more business, GrooveCar will be exhibiting at the Las Vegas CUNA ACUC conference beginning on June 25 to promote CU Xpress Lease
The theme of the 2017 conference will be “Discover,” focusing on the future of the credit union movement. The event explores trends that are reshaping the industry and will fuel growth through new ways of thinking.
“This is a very exciting time in the credit union industry; CUNA’s ACUC is taking the lead on promoting the need to stay ahead of trends. When credit unions are provided the right tools, the world opens to new opportunities,” said Robert O’Hara, vice president of strategic alliances at GrooveCar.
O’Hara explained that reaching members through innovation is part of the forward-thinking programs available at GrooveCar.
“As banks begin to get into online car buying, the GrooveCar resource has been ahead of this trend, with years of providing a car shopping experience to members and at the same time offering an auto lease program,” he said.
“Our leasing program makes credit unions competitive 100 percent of the time during the buying process. Credit unions are remaining relevant at every buying stage and staying competitive on many fronts; now is the time to solidify your position with members and strategic partners for the future,” O’Hara went on to say..
Credit unions will be able to experience first-hand the lead generation features built into the platform while at the show, through live demonstrations. Users of the platform can witness how the program is designed to acknowledge when members are performing different tasks during their vehicle-buying journey.
O’Hara added engagement with members is just one of the features that will really stand out for first-time users.
“We continue to provide a seamless digital experience; whether it’s from a stationary computer or on the go from a mobile device, it’s meeting the member where they are, with what they need,” O’Hara said.