HAUPPAUGE, N.Y.—GrooveCar is expanding service for its leasing product, CU Xpress Lease, extending to the West Coast via a partnership with Credit Union of Southern California in Anaheim.
“CU Xpress Lease has expanded into the top lease market in the country. Having already mastered the Northeast Region, we are excited to bring our highly profitable product into another lease market,” said Robert O’Hara, vice president of strategic alliances, CU Xpress Lease.
Auto sales are booming in California with new vehicle registrations in the state topping one million during the first half of 2015, nearly a 12% gain over the same period in 2014. Helped by a resurgence of U.S. automakers, sales are expected to reach two million by year end, making it the best year since 2006, GrooveCar stated.
“Our program provides incremental loan growth and increased efficiency along with 757 average FICO scores, 80% look-to-book ratios with terms averaging 37 months,” explains O’Hara.
Leasing’s consumer appeal continues to grow as car prices rise and people seek affordable monthly payments. Lease share of new vehicle volume hit new records in the third quarter, accounting for nearly 27% of all new vehicle sales in Q3, according to Experian Automotive. Overall, leasing has been on the rise since 2009. “CU Xpress Lease is the nation’s leading credit union lease program, featuring a portfolio in excess of $2 billion and more than 50,000 vehicles leased,” GrooveCar stated.
"Southern California is one of the top 10 auto lease markets in the country. Therefore, we knew we had an opportunity to better serve members by expanding our portfolio to include an auto leasing program,” said Tom Orman, SVP of lending at the $990-million Credit Union of Southern California.In select West Coast markets, up to 60% of new vehicle sales are made through leases, GrooveCar explained. During September 27,000 leases were funded in Los Angeles County and in 8,000 in Orange County, according to Experian.
“CU Xpress Lease is specifically designed for credit unions, allowing CUs to reap the benefits of leasing while maintaining control of the credit process. Our program eliminates the residual risk that had been associated with leasing. Leasing has existed for decades with cycles of great success. The key is to capture elements that had made it a success in a product that provides tremendous opportunity without the risk to the credit union,” added O’Hara.
“Credit union members benefit through flexible payment options and lease terms, mileage allowances, GAP insurance and a ‘no surprises’ wear-and-tear policy,” continued O’Hara. “CU Xpress Lease manages the disposition of vehicles at lease maturity, and is 100% responsible for the vehicles’ residual value and any excess wear and tear. Trending analysis regarding lease market penetration along with consumer spending patterns is a strong indicator that leasing will be in demand and poised for continued growth.”
“After a long period of vetting different vendors we made the decision to partner with CU Xpress Lease as they provided us with the best opportunity to capture significant volume in our market while mitigating the risk associated with leasing,” explained Orman.