HAUPPAUGE, N.Y.—GrooveCar reports that its CU Xpress Lease program is up 40% year over year.
In June CU Xpress Lease had its best month ever for volume, as more credit unions joined and utilized the program, the company said. It further attributed the increase to younger demographics turning more to leasing.
“Our program works to help credit unions compete in a market where leases can account for up to 60% of all loan activity. These newly reported numbers support how important it is to be able to compete through all auto loan products to meet market demand,” said Robert O’Hara, vice president of strategic services, GrooveCar.
GrooveCar said CU Xpress Lease provides credit unions with the ability to tap into an area of incremental growth with a program that manages the disposition of vehicles at lease maturity.
“CU Xpress Lease is 100% responsible for the vehicles’ residual value and collecting any excess wear-and-tear costs,” said O’Hara. “Because we eliminate the residual risks normally associated with lease programs, ours provides the credit union with an excellent opportunity to enter this highly profitable market. The credit unions get to manage what they do best—credit risk. With short terms and strong credit, our program’s popularity is on pace to fund close to $1 billion in 2016. As a national auto lease program for credit unions since 2007, CU Xpress Lease features a portfolio close to $4 billion with more than 70,000 vehicles leased.”
O’Hara said CU Xpress Lease’s executive team possesses decades of experience in the leasing industry, a primary reason why the program has been so successful.
“The goal is to operate from a position of being sound and safe for all parties involved,” he said. “This becomes clear when any credit union interested in pursuing our lease program contacts one of our partners and receives tremendous, positive feedback.”
“By providing car leasing options, credit unions are able to assist and advise members with options that they would not find at other financial institutions. Since initially offering CU Xpress Lease, Affinity Credit Union has been able to help more members through greater loan options, helping us ensure our top priority of convenient and quality service for all members,” said Theresa Williams-Barrett, vice president of consumer lending and loan administration at the New Jersey-based Affinity.
CU Xpress Lease has expanded from a regional credit union product offering in the Northeast, to a national program with expansion into California, Florida and other regions where leasing is popular, noted O’Hara.
“Credit unions in these markets are looking forward to leasing, because concentrating solely on traditional auto loan financing can deprive them of up to 60% of the loan market,” said O’Hara. “In Southern California, 38,000 leases are funded each month. So approximately 70% of all new cars sold in this market are leased. Without a lease program, credit unions are competing for just 30% of this market.”