It’s not only auto inventory that is impacting the auto market or your members’ wallets.
I was recently onsite with a credit union and had the opportunity to witness one of those great moments that the credit union movement is all about. A member was calling in to sing praise about her Loan Officer. One of those rare “I need to speak to a manager” calls we love to get.
So, what did this Loan Officer do that was so worthy of a manager’s attention? Simple, he sold this member an extended warranty.
You see, this member had significant repairs needed. When she took her vehicle into her local mechanic, she was shocked to find that a repair that would have cost her $4000 (already a significant amount to most members’ budgets) a few years ago, was now going to cost nearly $7000!
Inflation is real folks. According to the Department of Labor, motor vehicle parts and equipment are up nearly 15 percent across the US from last year with car maintenance and repair seeing its largest increase since 1974. Couple this with the shortage of qualified mechanics, and the cost of service and labor only drives the $$ up more.
If you have ever had the pleasure of going through one of our sales training courses, you should know that educating your members on the benefits of your extended warranty products is one of the BEST things you can do to protect your member’s budget.
This brings me back to my story of this member crying happy tears to her credit union.
As you can imagine, finding out that she was going to have to shell out $7000 dollars to keep her car running was a life-altering discovery. She was literally in tears (not the happy kind) digging through her wallet and mentally adding up how much she had available on various credit cards to cover this expense when it hit her. She thought she had purchased some sort of coverage when she did her loan with her credit union. A couple of calls later – she was right! Not only did her Loan Officer get her set up with this last year when she did her loan, but he was able to assist in helping her learn that the repairs she needed were in fact covered.
The happy ending. The member was able to get the repairs on her vehicle, no credit cards were maxed out in the process, and that Loan Officer and credit union just got themselves a lifelong member!
There’s a reason I like to call your ancillary products the perfect trifecta. They are good for the credit union- they earn you fee income while protecting your collateral. They are good for your originators- hopefully, they are earning an incentive for selling these products. Most importantly they are good for your members!
Now, possibly more than ever, you need to ensure you have a quality mechanical breakdown/extended warranty product and you need to ensure you have qualified salespeople able to discuss the benefits with your members. If your credit union is struggling to effectively “move the needle” on your ancillary product penetration your originators may need some help. Sales Training is always an effective way to set your people up for success. CULA provides both onsite and remote options to help train your originators.
Prices are going up on all goods and services, vehicle repairs included, and your members’ budgets are starting to feel the squeeze. Let’s make sure we continue to fight the good fight, and keep our members protected.
And hats off to Tom, you are my Loan Officer hero this week!
Jessica Vartanian
Senior Consultant
CU Lending Advice
Jessica@culendingadvice.com