Dealerships and credit unions -- at odds for years because credit unions generally won't let stores mark up interest rates -- are arranging more indirect loans and plan to do more.
The Tulsa Teachers Credit Union in Oklahoma, for instance, started offering indirect auto loans through dealerships in April 2009. Indirect auto loans already account for 60 percent of the credit union's monthly auto loans, said Kristi Brooks Cohea, vice president of marketing.
"As you can see, it has been a very successful product switch for us," she says. The credit union also continues to offer direct loans.
Another lender, Texans Credit Union, in Richardson, Texas, has had a "solid, successful, and profitable indirect auto lending program" for about 15 years, says Jay Champion, chief lending officer.
He says the credit union wants to originate about $65 million in indirect auto loans this year and to increase the business in 2011.