Ever since I purchased my first home (via a mortgage through a credit union several years ago) I have been consistently solicited for refinance offers from banks, brokers and other credit unions. I’ve refinanced the mortgage once but have no plans to do so again. Admittedly, had I not been asked (frankly, enticed) to refinance at lower rates and take cash out I probably never would have considered refinancing.
Fast forward a few years to 2012. Like most homeowners, I have little (if any) equity in my home. Refinancing the mortgage is less attractive for me and for lenders. So, I’m off the grid from a lending perspective, right? Wrong!
The auto lending market is very quickly ramping up, and credit unions stand to gain exceptional market share if they play their cards right. While many credit unions are already in the business of providing vehicle financing, I haven’t come across many that are actively pursuing vehicle loan refinancing. And this is where the biggest opportunity resides at the moment.
According to research conducted by Polk earlier this year, consumers are keeping their vehicles longer than ever before. Consumer applications to refinance car loans increased nearly 30% in January, to roughly 2,500, compared with a year ago, according to LendingTree.com's latest data based on the lenders in its network. The growth in refinancing is outpacing that of loan applications to purchase cars, which rose 10% in January and 15% in the fourth quarter.
Couple all this information with the fact that many credit unions can offer consumers the option to refinance their vehicle to lower monthly payments, shorten the term of the loan (or even lengthen the term of the original loan) and this very quickly becomes a win-win! American consumers are looking for a way to stretch their hard-earned dollars. Saving money on your monthly car payment is a no-brainer. With the almost unbeatable rates that many credit unions offer, if I’m in the business of lending, I’m not only focusing on vehicle financing at the point of sale, I’m definitely focusing on auto refinancing.