13 Steps to Choosing a Car Buying Service for your Credit Union

Woman Holding Keys to Red Car Behind Her

Your Credit Union decided to partner with a Car Buying Service. So…which one?

Your members want convenience. Your credit union wants loans. And you’re stuck trying to figure out just which service to choose! In every conversation we have with potential new credit union partners, someone asks, “so what makes yours the one we want?”

It’s a great question, and we address it by learning about their challenges, needs, and expectations. Many times, they decide the program we represent is the best fit. Sometimes, they don’t. And that’s ok.

This article addresses the main things to consider when you’re choosing a car buying service. If you’re in a meeting with us, they’re what we bring up. If you’re looking at another provider, we recommend asking about them. From our experience, they are what make the difference between a successful program and one which just sits on your website, unused.

Ready? Great.

Beginning Questions

Is your CU:

  1. Considering offering solely as a member resource?
  2. Seeking full integration with your auto lending process?
  3. Guiding members to your indirect dealers?
  4. On a mission to capture more direct loan business?

If you answered yes only to #1, stop reading now. Really, don’t waste your time. Credit unions which list their Car Buying Service in a “Resources” section get very little, if any, member traffic.

So, if you answered yes to 2, 3, or 4, this guide will show you the steps to take and exactly what to look for to meet your auto lending goals.

Our organization represents the TrueCar Car Buying Service. While we understand that this service may not be a fit for every credit union, we felt it was our duty to share what we’ve learned to help you in your evaluation of car buying services.

13 steps to Choosing a Car Buying Service for your Credit Union

  1. Cost
  2. Transparency
  3. Links to Financing
  4. Device Responsive (ie. work with everything!)
  5. Build & Search
  6. Search Widget
  7. Manufacturer Incentives
  8. Trade-in
  9. Carfax
  10. Marketing Support & Dollars
  11. Dealer Network & Management
  12. Data Analytics
  13. Member Experience

Let’s begin with cost.

1. Cost

Car buying services are generally free to institutions. They generate revenue by selling leads to dealers either through subscription or performance (pay when you sell).

If you’re looking at one which isn’t, inquire as to why and what they offer beyond competitors. From our experience, the free solutions offer ample benefits to delight your members.

When coupled with staff training, targeted messaging, and prominent marketing, the no-cost car buying services help you grow lending volume.

2. Transparency

Bag of Money Sign

How does the car buying service show pricing? For new cars, most will display the Manufacturer’s Suggested Retail Price (MSRP) and some systems also show Invoice Price. If that’s where the story ends, color us unimpressed. Your members want to know what they can expect to pay, not numbers which could be thousands of dollars different.

And then there’s used. Most systems you consider will show a price. However, ask if that number includes:

  • Dealer fees
  • Dealer add-ons (like paint coatings or nitrogen-filled tires)
  • Manufacturer incentives (not everyone is eligible for all of them)
  • Special member discounts

If it doesn’t share a price, and instead says a dealer representative will call the member, that’s a red flag. How would you feel in that situation?

No matter the platform you consider, ask about transparency in pricing.

Finally, a study by Edmunds indicates 83% of consumers do not like to “haggle”. Look for a service which provides a Guaranteed all-inclusive price.

3. Links to Financing

Loan Approved Green Stamp

The Car Buying Service has one goal: Sell cars. Yours is to finance them. The platform can accomplish these two goals simultaneously with strong Call to Action (CTA’s) buttons linking to your loan application. Ensure they are clearly placed throughout the portal, no matter what step the member may be on.

At minimum, we like to see a Financing link in the main navigation and on the portal home page.

Apply Now Button

4. Responsive Site

Mobile Car Buying Website Example - PenFed TrueCar

Over 55% of consumers use a mobile device when searching for cars on a car buying service.  Make sure that the service uses a “responsive” design.

Better yet, ask if the service can be “integrated” within your home banking app. In our experience, credit unions which have the car buying service integrated gain a whopping 30% lift in prospects!

5. Build & Search

All car buying services have features to “build” a new car, or search for a used car. There is only one thing to consider:

Can you build a car which doesn’t exist? This was one of our largest sources of member complaints until our provider eliminated the possibility.

What can happen on some services is a member builds a car with, say, the high-end audio system, but without remote ignition. However, that vehicle is only built with those two features in a package. Therefore, the price they received will be too low (as it didn’t include one of the items).

Where do you think the member will go to complain when the dealer says the car is more expensive than your Car Buying Service quoted? Exactly.

Meet member expectations by making sure they can only build vehicles which will be on the dealer lot.

6. Search Widget

In web parlance, a “widget” is a portion of a page dedicated to a specific task. Here, think of it like a shortcut. Using code provided by your service partner, your credit union can have new and used car search fields right on your web page. This ease of access immerses your members into the process faster.

Find Car Search Widget
A search widget example from one of our credit union clients’ websites

According to our own data, conversions (those completing a form, thus notifying your credit union of buying interest) increased 10-12% on sites which added this feature.

7. Manufacturer Incentives

Throughout the year, car manufacturers offer various cash incentives. You’ve seen the commercials:

  • “$1500 loyalty cash for returning buyers”
  • “$500 bonus cash for veterans and active duty military”

Some systems have backend connections to the manufacturers and can display these on their portals. It helps members know what discounts might be available for them. In addition, ask about targeted OEM (Manufacturer) incentives just for users of your Car Buying Service.

These special incentives trigger after your member completes a form and does not buy within a certain time period. These incentives, sent via email, aim to move those “fence-sitters” into buyers, and of course, borrowers.

8. Trade-In

Most members buying a car already own one. That means they share a common question: “What’s my car worth?” And a follow-up is also possible: “Should I sell privately or just trade in?”

Check to see if the car buying service has a trade-in calculator to help answer these questions.

In addition, ask if the service gives members the ability to get a quote for their car right through the site. Remember, simplicity is the goal!

9. Carfax

“Show me the Carfax!” Knowing the history of a vehicle before buying helps your members and also protects your collateral. Most car buying services offer and have links to Carfax where members may purchase a history ($39.95). Look for car buying services which offer a free Carfax on all or a significant portion of their used inventory.

10. Marketing Support and Dollars

Hand-written Dollar Sign on Orange Circle

Remember: Until your members know about your service, they will go where they always have. That’s the established sites, where your credit union will likely lose the loan to their financing systems.

Getting the word out that your service exists is essential. Getting marketing and financial assistance to do so is a bonus.

Help your marketing team by ensuring your car buying partner provides evergreen and  holiday collateral templates. Then ask if you are eligible for any financial assistance on your marketing campaigns. Seriously!

Would a cash refund or discounted interest rate drive more results? Seek out services that provide marketing dollars to maximize your efforts.

11. Dealer Network & Management

If you’re going to convince members to use your Car Buying Service, it will have to meet or exceed the competition. That means offering ample vehicle results, especially within your branch footprint. Also consider that members move, and, on average, 20% of members reside outside your geographic area. An online car buying service, with a national dealer network, gives your members the experience they expect.

Indirect

If your credit union has a large indirect channel, you may also wish to restrict the dealers in the system to those in your network. Not all car buying services support this functionality.

Car buying services support their dealer network by providing quality leads. This comes with requirements. Be excited, as this part is all for you! Their dealer agreements can include terms such as:

  • No Flipping guarantee
  • Price transparency guarantee
  • Dealer Relations team to ensure training and compliance

12. Data Analytics

There are two sides to the data puzzle:

  1. Receiving information on members using the system
  2. Analyzing performance on an ongoing basis

For the first, make sure any service you choose provides notification when a member expresses interest in a vehicle. Beyond a simple e-mail, look for an online database where you can pull up past lead, sales, and activity data. Then, portability, meaning: Can you get that information into a format you can use internally? Without putting in a “support request” and waiting?

Some companies will even arrange a daily SFTP data transfer. We see clients connect this to their CRM and loan origination system to automate:

  1. Sending an introductory & follow up email to the member
  2. Providing info to their call center
  3. Matching booked loans to calculate conversion percentages, while also leveraging refinancing opportunities
  4. Looking back at marketing campaign performance

13. Member Experience

People have short attention spans. (Not you, since you’re still reading…right? Ok, here’s every YouTube result for “cats”. We’ll see you in 50 years.)

Anyway, if a website doesn’t capture a person’s interest within 5 seconds, they’re off to the next page. If it’s too complicated, too confusing, or otherwise unfriendly, they’re gone as well.

So the site needs to be approachable. Would an 18-year old like it? What about a 50-year old? Congratulations, you found the one thing they can agree upon!

Satisfaction Scale on Red Background

Once you’ve found a clean and functional site, take a look at how it meets expectations. Does it ask the member to complete a form? What happens afterwards? If it’s anything less than, “shows clear pricing, displays vehicles in-stock nearby, and how to set up appointments”, you may be underwhelming.

What’s a member going to do after being unimpressed? Chances are, they won’t return to your service. Meaning, you won’t know when they (or their family) are in the market. Member experience is crucial.

Bonus: Get a Demo

Interested in a particular service? Insist on a live demo. Here’s a few things to look for:

  1. Is the home page clean with clear calls to action?
  2. Is your financing prominently mentioned throughout the process?
  3. Is it quick and simple to “build” a new car?
  4. Is it easy to search for and find a used car?
  5. If there was a form, after completing it, did the system provide the promised (or expected) information?
  6. Does the system provide real cars with actual prices or does it explain that a dealer representative will call with your “special” member price?

Click and Tap Your Way to Car Buying, Simplified

As with any other program your credit union considers, review a few services before deciding. The most important thing is that your members see the value proposition. At the end of the day, it’s about convincing them to use your site instead of the ones they’ve used for years. That’s it.

You can accomplish this by ensuring your Car Buying Service meets members’ expectations. When shopping for a car, the most important things to show are:

  1. Price I will pay
  2. Choice of cars on dealer lots near me

If you can do this, you’re well on your way to growing your auto loan channel.

We represent TrueCar’s Car Buying Service and provide the system to credit unions across the country. Let us know if you’d like to learn more about this service, and we will help you determine if it is a fit for your credit union.

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