CarSaver, CUNA Mutual deal pitches online car shopping to credit union members

A new partnership between CarSaver and CUNA Mutual Group allows credit unions to promote auto loans to members by giving borrowers notice of preapproval and a digital means to shop and buy the actual vehicle they'll be financing.

"The enthusiasm has been tremendous," Paul Rindone, CUNA Mutual vice president and product executive, told Automotive News on Friday, a day after the deal was announced.

CUNA Mutual Group is an insurer and financial services provider whose relationships include 95 percent of the nation's credit unions. CarSaver is a first-party and white label online auto retail platform provider that won a 2021 Automotive News PACE Award for its role in the Nissan [email protected] service.

CUNA Mutual Group also said Thursday that its venture capital arm CMFG Ventures "invested substantial funds to fuel CarSaver's growth."

Rindone said credit unions have two ways to direct their members to a CarSaver digital retail platform.

Through CUNA Mutual's CuneXus technology, a credit union can notify consumers of preapproval for a vehicle loan and provide a link to start shopping on the CarSaver marketplace.

CarSaver CEO Chad Collier said on Friday that the site will display vehicles and payments that meet the customer's preapproval criteria. Inventory from existing CarSaver dealerships will automatically be visible to new, incoming credit union customers, he said. Prices and trade-in offers displayed on the site are accurate; the customer sees values representing "everything out the door," he said.

Collier said more than 76 percent of consumers want to buy vehicles completely online.

"Today, only 1 percent do," he said.

The discrepancy lies in the industry's digital retail offerings, Collier said, which often doesn't allow a true online purchase. On most shopping sites and even digital retail platforms, "somewhere, they end in a lead form," he said.

The credit union also can pitch loans to existing borrowers eligible to "upgrade," Rindone said. Collier said these alerts would go to any credit union members who could obtain a newer or better model for a payment equal to or less than payments on their existing vehicles.

Collier said arming customers with information about their payment upfront made upgrading a vehicle as simple as upgrading one's phone.

CUNA Mutual estimated Thursday that 13.6 million credit union customers were eligible for an upgrade — a $476 billion opportunity for vehicle sales and loans.

The CarSaver link provided by the credit union will display only that credit union's rate in association with the vehicle, Collier said. Competing offers from other credit unions won't be visible.

However, the offer won't feature the direct rate the credit union would provide a customer over the counter. The dealerships listing vehicles on CarSaver retain the opportunity to profit from the auto loan through a finance reserve.

"Dealers are monetizing that loan," he said. "It's built to be a win for everybody."

The dealership also may sell the customer F&I products during the online transaction, Collier said.

As to why credit union wouldn't just promote its direct rate to the member, Collier said lenders who preapprove loans and make offers to a customer still find "they end up with a different bank" after visiting the dealership.

"That's the value of the platform," Collier said. The dealership makes money, and the credit union obtains the loan, he said.

Rindone said the partnership between his company and CarSaver helps solve what CUNA Mutual calls the "30/20 problem." Credit unions hold about 30 percent of outstanding auto loan balances, but they only have about a 20 percent share of loan origination transactions.