CU auto loan incentives mean record May sales

LANSING, Mich. (6/9/09)--A record monthly total of more than 38,000 General Motors (GM) and Chrysler vehicles were sold in May through credit unions' "Invest in America" program, bringing its total to 140,000 new vehicle sales since January. The program is on pace to sell 300,000 vehicles this year.

"Invest in America" is credit unions' auto loan discount program with auto manufacturers General Motors Corp. (GM) and Chrysler Corp. The program started in December with a four-state pilot program for GM and a 12-state pilot for Chrysler.

About 80% of the program's May sales were financed through a credit union, David Adams, CEO of CUCorp, told a teleconference Monday. CUCorp is a marketing company based in Livonia, Mich., and wholly owned subsidiary of the Michigan Credit Union League.

During the first four months of the program--prior to May--average monthly sales were 25,000 vehicles, Adams added.

About 22% of the sales were from members who previously owned an import, and now--through the program--have decided to buy from U.S-based automotive companies, according to GM research data of 1,500 credit unions members who participated in the program in April, Adams told the teleconference. Also, 37% who are in the program had previously owned a vehicle other than a GM product.

The rise in credit union members' auto purchases comes at a time when GM and Chrysler are reinventing themselves through accelerated bankruptcy restructuring efforts, CUCorp said. The credit union sector growth suggests that consumers are buying GM and Chrysler brands despite a feared negative stigma associated with bankruptcy.

"Credit union members are demonstrating that they like the quality and value associated with domestic auto brands," Adams said. "GM and Chrysler are appealing to a broad demographic of credit union members who believe in supporting American companies and their products.

"This support is despite the automakers' challenges, not because of them," he added. "Warranties backed by the federal government, rich incentives, credit union member discounts and the availability of affordable credit are contributing to this positive trend. This isn't a sympathy vote. It's a return to quality and value by people who want to support 'Made in America' products."

About 79% of respondents said the program strengthened their trust in credit unions, according to the GM research of the program's April sales, Adams told the teleconference.

More than 1,700 credit unions, representing about 40 million credit union members nationwide are participating in "Invest in America," Adams added.

courtesy of cuna.org