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Retail Sales Good for Cars, Bad for Department Stores
Thursday, August 15, 2013 7:00 AM


The U.S. Census Bureau announced that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation but not for price changes, were $424.5 billion, an increase of 0.2 percent from the previous month, and 5.4 percent above July 2012.

Total sales for the May through July 2013 period were up 5.2 percent from the same period a year ago.

Auto and other motor vehicle dealers were up 13.3 percent from July 2012, and lenders are benefitting from that. Mike Roark, senior vice president of lending/collections at Neighborhood CU in Dallas, Texas, says their auto loan portfolio continues to trend upward.

During the first seven months of 2012, Roark says the credit union experienced 10 percent growth in new direct auto loans, while in the first seven months of 2013, a 34 percent growth.

He offers credit unions the following tips to generate more auto loans:

  1. Streamline your processes. Your shop has to be able to respond quickly to member demand.
  2. Don’t be afraid of LTVs over 100 percent. Many good members are upside down. Remember, the collateral doesn’t make the payments, your member does.
  3. Your tellers are an excellent source for referrals; especially those working the drive through.
  4. Be willing to make concessions with rate and term when circumstances dictate. Make sure your policies allow you to do this.

If you can’t fully approve an application; don’t decline it. Many members will accept a counter offer such as shorter term, bigger down payment, or a combination of both.