One way to do that is to get your credit union involved with leasing GM or Ford vehicles through Invest in America. Now if you think that leasing is to risky for your credit union, I ask you to think again. With today's rising residuals and, thanks to Cash for Clunkers, a shortage of used cars, now's a great time for credit unions to get into the leasing business.
How is the Invest in America leasing program different from traditional leasing programs? Key reason: Leasing through Invest in America lessens your credit union's financial risk because of the manufacturer's contributions.
How else is the Invest in America leasing offer different?
- Reserve for residual losses: 10% through Invest in America, 3% through traditional lease programs
- Reserve provided by: 60% provided in cash by the manufacturer with Invest in America; provided by lease partner and taken from Acquisition fee through traditional lease programs
- Wear and Tear: Through Invest in America, the lease partner waives the first $1,000 of the wear and tear at lease end. Any additional wear and tear not collected at lease end is a credit risk. In a traditional lease program, the credit union bills the member for lease end wear and tear. If not collected, it is a credit risk.
- Residual Value Insurance: Through Invest in America, it is designed to pay claims after 10% of the reserve has been used*; in traditional lease programs the claim is paid only after 100 basis points has occured
- Risk: Leasing through Invest in America has low risk, with great growth and profit potential.
- Residual Values: Conservative with Invest in America, enhanced through traditional lease programs
- Competition: Through Invest in America, there is little to no bank and captive company competition, traditional lease programs have strong bank and captive company competition.
*Provided Black Book Average is the settlement floor.