"Cash for Clunkers" and Credit Unions - How Has It Helped?

With President Obama signing an extension for "Cash for Clunkers" - 3 billion dollars more - consumers have more time to trade in their gas guzzlers and buy a more fuel efficient car. Politicians and auto industry leaders are touting the effectiveness of the program and the jump start it has given to the ailing auto industry.

"Cash for Clunkers" has had an immediate impact on car sales and credit union loans across the country. According to Edmunds.com, in just the first tow weeks, the "Cash for Clunkers" program sent the auto industry's annualized U.S. sales to double what it was the first half of 2009. While it's too early to pull exact figures, credit unions are telling us that they are pre-authorizing and funding more car loans now than they have all year. The "Cash for Clunkers" program has created a surge in lending for credit unions across the country.

The American auto industry is reaping the benefits of the "Cash for Clunkers" program:

• Combined, the Big Three have brought in 45% of all new car sales.
• GM has sold the most cars out of all manufacturers - 18.7%
• Ford Motor Company achieved its first year-over-year sales increase since November 2007
• Chrysler's Jeep Wrangler, Jeep Compass, Dodge Avenger, Chrysler Sebring, PT Cruiser, Dodge Caliber, Dodge Grand Caravan and Chrysler Town and Country are in short supply, with dealers running out of inventory on their lots.

How can your credit union increase your auto loan portfolio and take advantage of the car buying boom created by the "Cash for Clunkers" program?

• Clearly explain the "Cash for Clunkers" program to your staff and members. Dupaco Credit Union has a page on their site that clearly explains the "Cash for Clunkers" program and gives their members a call to action to secure their financing at the credit union.
• Dealer relationships are key. The "Cash for Clunkers" program is run through the dealers, so be sure to leverage your relationships with them, whether you have an indirect lending program or not. The University of Wisconsin Credit Union has a list of their preferred dealers linked to their auto loan page to help strengthen their relationship.
• Tie the "Cash for Clunkers" program into the great incentives offered by the American auto industry through Invest in America

Has your credit union seen increased business because of the "Cash for Clunkers" program? If you have, let us know! Share your story with us at www.lovemycreditunion.org.