Credit unions have long been leaders in automotive lending. However, with more consumers starting their car-buying journey online, credit unions must adapt to new purchasing behaviors, especially as the electric vehicle (EV) market continues to grow.
Embracing online car buying
The trend towards online car buying is undeniable. A significant portion of consumers now prefer to research and purchase vehicles online. According to a J.D. Power report, 25-30% of buyers are interested in completing their purchase online, with this figure rising to 40% among EV buyers. This shift necessitates that credit unions modernize their lending strategies to meet these new consumer expectations.
The rise of the EV market
The EV market continues to grow with year-over-year increases as 1.2 million buyers chose electric vehicles in 2023. This growth, coupled with the direct-to-consumer sales model popularized by companies like Tesla, has set a new standard for a seamless car-buying experience. Credit unions must explore innovative lending strategies to stay competitive and relevant.
Connecting to new lending channels
To address these evolving consumer demands, Origence has introduced FI Connect positioning credit unions with embedded financing opportunities directly at the point of sale, where purchasing decisions are made. Through an exclusive partnership with Tesla, FI Connect enables credit unions to offer financing options directly to consumers, a first in the industry. While FI Connect initially focuses on Tesla loans, it will soon accommodate other loan types, allowing credit unions to build a larger lending funnel. As the lending landscape continues to evolve, credit unions must embrace embedded financing channels to remain competitive. Expanding into direct-to-consumer models will be crucial for future growth.
Success story: Silver State Schools Credit Union
Silver State Schools Credit Union (SSSCU) is an early adopter of FI Connect. By integrating this platform, SSSCU expanded its market share in the EV lending space. Since its implementation in November 2023, the credit union has funded $17 million in loans and onboarded more than 400 new members. This success demonstrates the potential for credit unions to thrive in the evolving auto market. Credit unions like SSSCU are already reaping the benefits of this approach, and it’s only a matter of time before more institutions follow suit. By staying ahead of the curve, credit unions can continue to be leaders in automotive lending, even in the fast-growing EV market.
Fuel your credit union’s lending success
As the automotive industry continues to evolve, credit unions have a unique opportunity to lead the charge in EV lending. By embracing online car-buying trends and leveraging innovative platforms like FI Connect, credit unions can meet the growing demands of EV buyers and stay competitive in a rapidly changing market. The success of early adopters like Silver State Schools Credit Union highlights the potential for growth and member acquisition. By staying ahead of industry trends and expanding into direct-to-consumer models, credit unions can secure their place as leaders in the future of automotive lending.
