GRAPEVINE, Texas–Representatives of four different auto dealers offered insights into what’s going on now in their businesses, how credit unions could better work with them and more during a panel discussion here at which they also answered CUs’ questions.
The panel, an annual and popular part of CU Direct’s Drive Conference, included:
- Ralph Larson, finance director, Dick Hannah Auto Group, Portland, Ore.
- Andy Crews, president/CEO, AutoFair Auto Group, New Hampshire
- Danny Cox, senior director, F&I, Ken Garff Auto Group, Salt Lake City (91 franchises)
- Kara Brinley, VP and general manager, Penske Motor Group, who is overseeing the opening of a new Toyota dealership in the Dallas area)
The panel was moderated by Jim Treece, retail news editor with Automotive News. Treece’s comments on the automobile market and other issues were featured in CUToday.info here.
Here is a look at what was discussed:
Treece: What are you doing at your dealerships that is new in digital retailing, and what do CUs need to be doing right now to stay abreast?
Larson: As far as the dealership, we have been approached by quite a few outside sources to do more through social media and our website to initiate a transaction and then follow through. It seems like by the time a customer gets to our physical address everything is pretty much picked out except for seeing the vehicle. We are looking for ways to advance that sale even further and button everything up by the time the customer gets to us. In the Pacific Northwest, I would say CUDL and our credit union base is pretty savvy with technology and they are funding us fast. We try to be as leading edge as we can; the days of kicking tires and driving five or six different cars are gone.
Crews: Right now, the online buying process is changing and evolving pretty quick. Every manufacturer is testing their own online buying process. There are a lot of hurdles in that, and credit unions and banks play a key part, and that is the decision support for an individual once they submit their application online. Once that customer enters the process you are trying to avoid any hurdles, and one is once they submit their application and we tell them we can get them financing at a certain price, and that turns out not to be the case when they come in. That’s an issue.
Cox: The biggest issue for us is trying to dictate that experience with customers who want to work at their own pace. What we have focused on is meeting the customer where they are in that buying process. When they walk into the showroom they don’t want to go through any processes again. We want to have it be consistent in look and feel. We have tried a few off-the-shelf solutions, but it feels like we’re about 70% of the way there and we have to tweak it. On the lending side, it is really important to provide the customer with the opportunity to see a variety of options on purchasing a vehicle and get as close to that payment as we can.
Brinley: Thirty percent of consumers if given the choice would prefer to do the entire process online and avoid the showroom altogether, so it just makes that process more important. I was surprised to hear 27-million consumers came into the showroom for a test drive, but double that number did it through YouTube. From a credit union standpoint, just having the vision of making it as transparent as possible and seamless when they get to the showroom is so important.
Speaking to CU Direct Drive 18 Conference, from left: Ralph Larson, Andy Crews, Danny Cox, and Kara Brinley.
Treece: What about speed of transaction and funding?
Larson:The way the consumer is working these days is they have done their shopping before ever arriving at the dealership. I think from a finance perspective we don’t have the luxury of taking as long as it takes. Once they get to us, the clock really is ticking. You shake hands on a number and people think it’s over, and it’s not. There is now a process to get through and every customer is in a hurry. So, speed is extremely important; if I can have an approval instantly from one lender and have to wait 20 minutes for another, that’s something to consider. In the Northwest, we are credit union heavy, so the majority of our customers already know what their rates and terms are before they ever get to us.
Brinley: The guest experience they want is to be in an out in an expedited fashion, and 20 minutes is an eternity. On the funding side, it’s about working toward streamlining the process. Are there forms we could have sent to the guest ahead of time? Are there special assignment forms that could have been sent digitally?
Crews: From a funding perspective, cash is king and always has been. We are in a cash-turning business as much as any other business. The faster we turn money means we can put that money to use elsewhere. It’s expensive, and as interest rates start to rise it’s going to become even more important.
Treece: How can there be better partnerships? What goes into that mutual respect?
Cox:There is a basic understanding that we sell cars, and understand you want to increase your member base. When the model works correctly it benefits both sides. What we’ve seen over last few years is there are a number of credit unions that really get that and invest a lot into that indirect model and walk into stores ready to help. From the store standpoint, we need someone on the same side of the desk there to help us. Those that understand that have been able to understand their member base in their markets. Also, understand who your customer is. Not the member–the dealer and the finance guy and how they are paid and how cash flow works and CITs work. Then you can speak to their needs. It’s no secret. We want to get customers on the road and keep them on the road. We understand once they are a member you can then work with them on other products, like mortgages or checking.
Brinley: I think winning in this business requires a great partnership and those aren’t just built on trust, but on a shared growth and vision. It’s about innovation and being aware of what your guests are looking for, which is the easiest way to get in and out of this process. Understand that when a lot of your credit unions are closed is when our guests are showing up.
Larson: Credit union reps come in and tell me they have spent time with our finance department. Understand that our finance managers really have nothing to do with where that deal is placed. They aren’t going to be able to funnel you much business. That’s determined by the time you show up.
Audience member: Members are often confused over first payment and where to make it. They say, “I didn’t know I had a loan at the credit union.” What can we do to make that less painless? This happens all the time.
Larson: I think that’s pretty basic and would be on the auto dealer to make that clear. The dealer probably needs to slow down and clarify.
Brinley: I agree, and I think communication is key. If there are credit unions out there having those issues, I think it needs to be communicated to the dealership.