Exploiting mistrust of big banks to win loans
"With the financial challenges of the last couple of years, there is a mistrust of large banking institutions," Phil Maniaci says. "We've seen a fair amount, a good number of people who have moved their accounts from banks to credit unions."
Credit Union Direct Lending, better known as CUDL, is attracting more dealerships to list their inventory on its AutoSMART shopping Web site. The site, cudlautosmart.com, enables car shoppers to browse the dealership listings and then apply for a pre-approved loan through a credit union.
Phil Maniaci, CUDL Automotive senior vice president, says AutoSMART, launched in 2005, now lists 1 million new and used cars and trucks in dealership inventory, up more than 50 percent from a year ago.
More than 7,000 dealerships are enrolled, an increase of about 1,000 in the same time frame.
Maniaci (Ma-nee-AH'-chee) spoke recently with Automotive News Special Correspondent Jim Henry. CUDL is based in Ontario, Calif. Maniaci's office is in Marlborough, Mass.
How does AutoSMART work?
Primarily it allows dealers to upload their inventory on credit unions' sites. They upload their inventory and receive referrals from credit union members. We have 34 million members in 1,027 credit unions.
And you can also apply for a loan?
What makes it unique is that since these are credit unions, we also have a lending platform. Like a site that is tied to an automaker, the customer can find a vehicle at a dealership.
It's a direct loan as opposed to an indirect loan, right?
Customers can decide to conduct business at the F&I office. Or before they get to the F&I office they can pre-approve themselves through a credit union.
When they get to the dealership, can they switch to something else, say if an automaker is offering some big incentive?
Of course. They're like any other customer.
So pre-approval is only for an amount, not a specific vehicle identified by vehicle identification number?
It's what we call a SMART approval. ... There's a dollar amount. There's a selected vehicle. Say it's a Chevy Tahoe for $34,000. There are calculations for, say, 10 percent or 20 percent down, or whatever. The customer plugs that information in. They can add wheels, etc.
What happens at the dealership?
At the dealership, the dealer enters a VIN and adds whatever aftermarket products the customer has selected. If everything is within the parameters of the pre-approval, then everything is OK and pre-approved.
Does the dealership get a flat fee or dealer reserve?
Some do pay reserve. Some pay a flat fee. It's up to the lender.
Is there anything in particular driving growth?
It exploded from when we first started in 2004-2005. We continue to add more dealers every month as we add more credit unions.
There has been tremendous growth. With the financial challenges of the last couple of years, there is a mistrust of large banking institutions. We've seen a fair amount, a good number of people who have moved their accounts from banks to credit unions.
It seems much easier to qualify to join a credit union now.
It's not like the old days where you had to be part of, say, a manufacturing plant or a union. The term for that in the industry was "select employee groups."
What you have today is called a "community charter," that's the term in the credit union vernacular now.
Are you campaigning to add dealerships?
We have about 7,000 now. We are always campaigning to add more.