A Florida credit union’s ad campaign beating up dealers and auto lenders for “rate markups” is hard to look at, but dealers and lenders should check it out to see what they’re up against in terms of public perception and in case the approach catches on in other states.
The Space Coast Credit Union ads treat dealer reserve -- the small amount of interest lenders allow dealerships to add to the buy rate to compensate dealerships for acting as a middleman -- like it’s a dirty secret.
To distinguish itself, the Melbourne, Fla.-based credit union takes pains to point out in an advertising and social medial campaign graphic that it “has never participated in rate markups.”
Where to start? There are kernels of uncomfortable truth in the credit union campaign, along with some glaring omissions, from the point of view of anybody who knows anything about indirect auto financing.