Converting credit union buyers

EDITOR’S NOTE: This is the third column in a series by Gart Sutton who describes ways to convert customers to dealer financing.

Let’s look at how my boss, Steve, converts the first-time credit union buyer.

Steve: Mr. Customer, you mentioned you are planning to use your credit union. Have you used a credit union before?
Customer: No, this will be my first time.

Steve: May I ask how much credit you’ve obtained in the past?
Customer: Very little.

Steve: Your credit union may be a great source of cash; however, it may not be the best place to establish your credit. Would you like some advice on how you can better position yourself for a safer, more secure future?
Customer: Sure, go ahead.

Steve: Some credit unions do not report to the credit bureaus. Without this reporting, other financial institutions are unable to measure your borrowing performance. In other words, you cannot establish a meaningful credit track record.
Customer: Yeah, but I like the convenience of the payment being taken out of my paycheck.

Steve: Payroll deduction is a terrific feature. Nevertheless, your financial objectives should determine whether you use your credit union or not. If your objective is to establish credit, payroll deduction may be the wrong way to go. You see, when you make an involuntary payment to the credit union, future lenders may not consider this proof of good credit. You have not established a responsible track record that will reduce the risk a bank takes in making you a loan. I strongly suggest that you keep your credit union available for future emergencies. I’m recommending that you concentrate on building a strong, secure credit track record through our dealership plan.
Customer: What does this dealership plan include?

Steve: It includes many benefits that you will find invaluable. For example, if you get sick or injured for 14 days or more, we will arrange for your payment to be made until you return to work. The real benefit is that you never have to pay back the amount paid while you were getting well. Also, if you should pass on while you still have this loan, it will be paid off.
Why don’t I go ahead and get some brief credit information to see if we can make our dealership financing available to you?

Steve handled the experienced credit union borrower in a slightly different way.

Steve: Mr. Customer, you mentioned you are planning to use your credit union. Have you used it before?
Customer: Yes, for years.

Steve: Then you know what a great place your credit union is for borrowing money. Many of our credit union customers feel that convenience plays a major factor in their decision. That’s why they take advantage of our one-stop shopping. You only have to deal with me, and you can tap into multiple financial resources.
In addition, you won’t have to wait for your credit union to process your application. Furthermore, some credit unions don’t offer the confidentiality that we can offer you.
Customer: I still like doing business with my credit union. That’s not enough reason for me to change my plans.

Steve: One last thing and then I’ll let you make your decision. Have you recently established credit anywhere else besides your credit union?
Customer: No, not for a number of years.

Steve: I know you know the importance of good credit. Sometimes our credit union buyers fail to maintain an up-to-date credit standing by not actively using other credit that is available to them.
Most financial institutions like to see a wide base of credit references. Sometimes they discount a credit union reference because (a) they may not report to a credit bureau and (b) they may have an involuntary payroll deduction.
I’m sure you can see that while a credit union is a great place to get cash, it may not strategically be the best alternative for you. All I need is a little information, and we can see if our dealership plan can be made available to you.