Credit unions need revenues. Members need financial services, and today we’re honing in on vehicle service contracts. Your mission is to build financial empowerment, while achieving those two goals.
And where does GreenProfit Solutions feature in this? Great question. We do the research, shared in our Learning Library, to bring you the best tools for your mission, like vehicle service contracts.
At no other time are financial services more important for members than when addressing the unexpected.
What is one surprise nobody wants? When a member’s car breaks down, creating massive expenses. Typical vehicle repairs cost between $500-600. Many of your members cannot afford this without putting off other payments. Some simply cannot find the money to have the car repaired.
Now they cannot get kids to school, drive to work, or pick up groceries. With income affected, why pay the loan or insurance for a car that doesn’t work? As you can imagine, both of these scenarios create negative financial spirals with wide-ranging effects.
No one wants this to happen. Thus, you offer vehicle service contracts, aka, extended warranties. Unfortunately, because some vehicle service contract programs can be more challenging to demonstrate the benefits than GAP, credit unions pay them less attention, and that’s a shame.
Vehicle Service Contracts Protect Household Finances
Vehicle service contracts can be one of the most important mission-driven programs you provide, and should be clearly presented alongside all auto loans. If a member is concerned about the expenses GAP can cover, vehicle service contracts are worth a look. Just a couple repair claims can pay back the investment and then some.
Most protection products kick in after major events: A totaled vehicle, a lost job, a major injury. Vehicle service contracts can step in if the steering joint breaks (That’s a thing, right? I’m far from an ASE-certified mechanic.). It’s a small issue that can become a big problem.
We believe empowering members is key to fulfilling the credit union mission, and vehicle service contracts are a part of that.
Oh, and there’s one more thing: Empowering members isn’t our only goal. What if your credit union were empowered with full control over your vehicle service contract program? And what if your credit union shared in the revenues? That’s pretty mission-driven.
Embracing your mission at every level means doing something about those punitive fees. But how to replace those revenues? Get answers in our Replacing Overdraft & NSF Fee Income Cheat Sheet!
Vehicle Service Contracts By Your Credit Union…Truly
Most providers have administration costs along with reserves factored into the price. Makes sense; it costs money to run the program, and reserves are essential to paying claims. But did you know most years, reserves aren’t fully depleted?
Yep, there’s often money left over after paying member claims. Who keeps it? Traditionally, the administrator. However, there are a few vehicle service contract programs where your credit union shares or earns all that revenue.
You can use it as you see fit. Additional income, a charitable contribution, member rewards…it’s your money for driving forward your credit union’s mission.
To be totally transparent, GreenProfit Solutions offers a program that offers credit unions a profit share, delivering 50-100% greater revenues over the traditional no-share arrangement.
And because the reserves are yours, you get the final say about claims. Want to pay that member’s repair, even though it’s technically not covered? Totally fine. You’re in control.
If you ask your current provider about it, they’ll probably tell you this is all possible – with a price increase to your members. That’s because those reserves were always considered part of your administrator’s revenue. So yes, for them to offer it, they would have to raise prices.
That’s not the case when you work with a vehicle service contract provider built for credit unions, by credit unions. Talk about mission-focused.
We encourage you to learn more about a vehicle service contract program with full profit share, as well as keep an eye out for some red flags in vehicle service contract offerings.
Vehicle Service Contracts are Part of Our Credit Union History
Did you know our VP of Marketing, Keith Winn, was among the first people to bring vehicle service contracts into credit unions? So when we say we go way back, it’s no exaggeration. Helping members while providing needed revenues has always been our goal.
This is just one way your credit union can deliver more mission-driven revenue. Be sure to Subscribe to the Learning Library to discover them all, as well as a dozen other topics for due diligence and market research!
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Dedicated to helping your credit union, large or small, deliver mission-focused financial empowerment to your members. And make a positive impact on your community while you’re at it.