September 3, 2024
Auto lending has been going through some big changes as of late. Lenders have had to travel a bumpy road the past five years in a virtually untested environment. In a recent episode of “22 Minutes in Lending,” Vince Passione sat down with Dave Ledwell, the Senior VP of Consumer and Business Lending at Navy Federal Credit Union to discuss auto lending and how to create a winning strategy in a disruptive market. They talked about some of the big ways Navy Federal is continuing to gain share and grow within the auto lending sector while most importantly meeting the wants and needs of its members.
Check out Navy Federal’s Top 5 Auto Lending Strategies:
1. Keeping the Auto Lending Process Simple:
A primary focus for Navy Federal is making the auto lending process as easy and quick as possible. They’re pushing for pre-approvals, cutting down on paperwork, and offering competitive products. “We try to keep it simple and financially beneficial for our members. By getting pre-approved, members better know their budget and what they are looking for before heading to the dealership. It gives them more negotiating power and a better sense of control throughout the entire purchasing process.”
2. Placing Value on Member Relationships:
Navy Federal also puts a lot of emphasis on recognizing and rewarding long-term members. How? They use models that look at a member’s history, performance and relationship with the credit union. Dave said, “The longer you’ve been a member, the more products you have with us, and the better you’ve performed, the better your risk profile and experience.” This approach puts the member first, while continuing to build a relationship of trust.
3. The Dynamic World of Car Dealerships
We all know it can be tricky to deal with car dealerships. Dealers often try to flip financing deals to their advantage, but Navy Federal tackles this
by building strong trust with their members. “Our members come to us first because they trust us and know we’ll give them a decent rate and take care of them,” said Ledwell. By preparing members with pre-approvals and offering competitive products, Navy Federal gives their members the upper hand. This reduces the chance of members being swayed by dealership offers, keeping more money in their pockets.
4. Flexibility in Times of Change:
The auto market has been volatile, especially during and after the pandemic. Navy Federal has managed to stay strong by being proactive. During the pandemic, they decided to lean in and lower rates, which helped them gain market share. Ledwell explained, “We dropped our rates and picked up share. Our members never stopped buying cars, and we grew by double digits.” This strategy worked then and continues to work now, as they remain adaptable to the market and continue to place their focus on what their members need and when they need it.
5. Embracing Electric Vehicles:
Electronic vehicles (EVs) are trending and with this rise, getting comfortable with new technologies is essential. EVs come with unique challenges like concerns about battery life and residual values, but they also offer new opportunities. Ledwell explained, “We’re going on that journey with our members. We finance EVs and hybrids, meeting their needs while managing our risk.” By including EVs in the portfolio, Navy Federal continues to work toward providing the right service to each of their members. They also stay relevant by recognizing the continuing shifts within the auto market.
Bonus: It Is All About the Service:
Above everything else, Ledwell empathically emphasized the key to their strategy is providing excellent service. “Members care about the service you provide. It doesn’t matter whether you’re a small or large credit union; what matters is how you solve your members’ problems. If you’re focused on serving and listening to your members, you can remain relevant and grow. We put the member first, and our growth is the outcome of doing the right things by them.”
Well said, Dave.