SOUTHFIELD, Mich.–A credit union-backed program that gained national attention when it was launched during some of the worst days of the financial crisis has come to an end.
CU Solutions Group, a unit of the Michigan CU League, said that effective Oct. 1 it will suspend the General Motors Credit Union Member Discount Program, the partnership with the auto manufacturer that is credited with having sold nearly one-million GM vehicles over the past six and one-half years. The program received national acclaim and coverage in numerous publications and broadcast outlets.
But CUSG noted the program may also return in some form in 2016.
The first-of-its-kind partnership with GM was created by the Michigan league at the same time the home state auto manufacturer and large employer was watching sales plummet as it eventually headed into bankruptcy. The program was aimed at helping General Motors, credit unions, and their members.
CU Solutions Group CEO David Adams said the program has translated into nearly 400,000 auto loans for credit unions, while also saving those CU buyers an average of $750 per vehicle, in addition to the better rates on financing.
“However, due to the improved financial strength of General Motors and the strong demand for its products in the U.S. during our recovering economy, GM has now informed CUSG that the program will be suspended effective October 1st of this year,” said Adams in a letter to credit unions. “Of course we are disappointed by this news, but we are not completely surprised. Many within our industry were very happy when we negotiated this contract with GM during the worst economic recession our country has seen since the Great Depression. Within our industry some wondered if the program with GM would last even six months. Instead, working together, the partnership continued for almost seven years with great benefits for GM, the largest automaker in the U.S., for credit unions and their members.”
Adams said that so far in 2015 200,000 vehicles have been purchased and financed through the GM/credit union program.
“The reality is that GM’s sales are so strong that the cost of these incentives does not provide a good ROI for the company in the current strong sales environment,” Adams said. “Additionally, there are rumors that GM may be returning to a position of relying more exclusively on its wholly owned finance company, GM Financial, for financing vehicles at its dealerships. This is similar to how most larger automakers operate now and how GM had operated previously with GMAC as its captive finance company.”
According to Adams, effective today, Sept. 1, 2015 members will need to verify to the dealer that they have been a member of the credit union for at least 60 days in order to qualify for the CU Member Discount. The reason is to reduce the likelihood of buyers taking the discount unnecessarily when they are already likely to complete their purchase in a dealership.
“Despite our obvious disappointment in GM’s decision to suspend the credit union member discount program, on a positive note, GM has expressed an interest in the first quarter of 2016, to engage in discussions with CUSG relating to the possibility of implementing private offers periodically,” said Adams.
The General Motors partnership has led to numerous other discount programs for credit union members as part of the Love My Credit Union Rewards program, including with Intuit (Turbotax) and CU Road Pal (formerly CU Auto Club).