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CUs lower rates in race for auto loans
MADISON, Wis. (5/13/08)--Some credit unions are coping with the downturn in the economy by lowering auto lending rates to gain an edge on the competition. Credit unions trying to make auto loans more appealing to members include:
* Pacific Service CU, a $1.107 billion asset, Walnut Creek, Calif.-based credit union, announced it lowered auto rates and simplified its loan program. Qualified borrowers will receive rates of 5.79% annual percentage rate (APR) for terms up to 66 months, and 6.79% APR for terms of 67-84 months. The new rates apply to new and used vehicles, including boats, motorcycles and recreational vehicles. It also is offering a $100 incentive to members to refinance their existing auto loans. * Fidelity FCU, a $30 million asset Sandy Springs, Ga.-based credit union, launched a new auto loan campaign for May, partnering with Enterprise Car Sales to offer loan rates as low as 2.9% on used cars. Fidelity has extended this offer to its members and to anyone who lives, works, worships, volunteers or attends schools in Sandy Springs. * Elevations CU, a $757.9 million asset, Boulder, Colo.-based credit union, last week lowered its best rate on Harley-Davison motorcycles to correspond with the same rate as its automobile loans. Motorcycle purchasers can obtain rates as low as 5.49% with the credit union on Harley-Davidson motorcycle financing. “Because Harleys are a high-ticket item, financing has been a hurdle to ownership for a lot of people. It’s not unusual to see loan rates in excess of 7% on these bikes,” said Craig Burkhard, chief lending officer at Elevations.
During first quarter 2008, credit unions' vehicle loans outstanding declined at a 6% annualized pace, compared with a decline of 2% for the same period a year earlier, says Southwest Corporate Investment Services. Those loans increased less than 1% during all of 2007, Brian Turner, director of advisory services (News Now May 12).
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