Credit Unions have been helping members finance vehicles since they were first established. Over many decades CUs have grown their indirect auto loan portfolios with aggressive rates and technological upgrades through dealership financing relationships. Unfortunately, when all is said and done, interest margins have significantly dropped over the years. One client reported only a 93-basis point interest spread on its significant indirect portfolio.
Many credit unions have started to reduce their reliance on indirect loans or completely eliminated them from their portfolio due to the low-interest margins and high-member churn. This simply is not sustainable. We believe a well-balanced auto loan portfolio with a new approach related to indirect loans is the path forward. The Stellar Indirect Tool Kit is designed to transform indirect loans and turn them into a key-driver of PFI relationships. In short, let’s replace what has become a wholesale product play and convert these loans into key drivers of long-term relationships.
Step One: Analysis
We examine indirect households, overlay key PFI trends and attrition analytics, and calculate projected ROIs. By doing so, we are able to map the indirect landscape into three priority groups: Outliers, Proximity, and Franchise. Step Two: Retention We execute targeted marketing to retain and convert indirect relationships with cost-effective variable-frequency marketing, persona-based creative designs, and real-time in-market triggered messaging.
We believe it’s paramount to transform our views on indirect auto loans. These loans significantly help in growing the asset base of the credit union and can also accelerate sustainable member and deposit growth if managed properly. The Stellar Indirect Tool Kit is the direct solution to your indirect problem.
Step Two: Retention
We execute targeted marketing to retain and convert indirect relationships with cost-effective variable-frequency marketing, persona-based creative designs, and real-time in-market triggered messaging.
We believe it’s paramount to transform our views on indirect auto loans. These loans significantly help in growing the asset base of the credit union and can also accelerate sustainable member and deposit growth if managed properly.
The Stellar Indirect Tool Kit the direct solution to your indirect problem.
Craig Simmers is the Founder of Stellar Strategic Group. Contact him at craig.simmers@thestellarfinancialgroup.com or call 410-990-0172.
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