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| More Americans Driving with “Sense” Houston, Texas, May 2003 - More car buyers than ever before are choosing “Driving Sense”...a residual-based financing option available through a growing number of credit unions across the country. Driving Sense is the brand trademark provided through Houston-based Auto Financial Group (AFG). According to Auto Financial Group President, Richard Epley, the increased market penetration for residual-based lending allows over 100,000 credit unions members in Texas alone to enjoy online convenience when financing their vehicle. But perhaps just as importantly, the AFG residual program offers credit unions the opportunity to tackle 0% finance rates and other aggressive dealership strategies head-on. The Driving Sense software package offers credit unions, and the members they serve, several lending advantages...most notably speed, efficiency and affordability. Driving Sense online loan payment calculations are precise and immediate. For credit union members looking to drive the most car for the money, the residual-based product allows members affordable monthly payments on higher-end vehicle pricing that would be otherwise infeasible with conventional financing. And, the Driving Sense finance option has apparently caught fire with a growing number of notable credit unions nationwide - including El Segundo, California-based Xerox Federal Credit Union. Xerox FCU serves a large, employee membership base across nine states and supports over $630 million in assets. “The Xerox (FCU) partnership”, said AFG’s Richard Epley, “is important for their members but equally important to AFG in helping us become the nation’s largest residual-based finance company for credit unions.” Epley further credits AFG’s market penetration to it’s proprietary software, internet-accessible loan quotes and overall user-friendly benefits. For example, the program allows credit union loan officers the ability to compare AFG monthly payment “balloon” schedules to conventional financing. In addition, member- borrowers can go online to a secure environment and calculate their loan payments using AFG’s loan calculation software. Industry insiders believe that the highly-touted AFG software is one of the company’s key advantages for successful product positioning in the credit union market. Roughly 20% of auto loans booked within the $122+ billion U.S. credit union loan market are residual-based products, and the number is climbing annually. It is estimated that residual financing products in credit union loan portfolios will continue to rise. Such increased penetration should result from an increased market presence coupled with more aggressive lending strategies from credit unions - most notably designed to combat 0% financing and other dealer incentives. The rising credit union member demand for residual-based lending has, understandably, attracted growing attention from credit union management across the United States. As more and more credit union members are benefiting from AFG’s residual product with a lower monthly payment, loan terms up to 60 months and actual ownership of the vehicle, credit unions, too, enjoy advantages of fast, online quotes, a flat fee verses loan percentage, risk reduction guarantees and third party vehicle disposition. And while the AFG Driving Sense program is a timely option for the member wanting to drive more car for the money, it has equally made good “sense” to a growing number of credit union clients By offering affordable finance options like Driving Sense, credit unions are discovering creative ways to keep their auto loan members happy - from the competition.
Source: Federal Reserve Board Survey of Consumer
Finance
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