Lacking 2005’s ‘Employee Pricing’ boom by automakers, the market remained relatively strong in 2006.  The following graph provides significant information as 2007 auto promotions emerge in their planning phases. 

Reviewing the history for both years we notice auto sales follow a fairly consistent pattern, aside from 2005’s spike in June and July from ‘Employee Pricing’.  Tax returns place March as the usual leader in monthly auto sales during the year, with the summer months close behind for 2006.  Often overlooked, December remains a key-lending month in terms of new vehicles.

Auto loans provide significant loan income for Credit Unions of all asset sizes, but especially those under $250 million in assets unable to place a great deal of focus on unsecured lending or lacking advanced real estate lending services.  Marketing auto loans is not always easy and is often a double-edged sword. 

When viewing the graphs, it is easy to see when the most vehicles are sold throughout the year and plan your promotions accordingly.  At the same time, we must also remember nearly every other financial institution is looking at the same data and planning a similar strategy. 

Marketing on high-sale months, you run into four factors of competition you might otherwise avoid with promotions during middle to low-sale months. 

-      An increased number of competitors makes having your message heard or seen a much harder task.

-      Price wars will result in lower loan rates and an overall lower return for the CU in terms of loan income.

-      Standing out from the competition often means adding on incentives to your loan products that not only decrease your overall return, but can dramatically impact your marketing budget.

-      Larger financial institutions will offer dealership finance personnel incentives to filter loans to their institution – a level of competition many smaller institutions are unable to counter effectively.

As you begin to plan marketing campaigns focused on vehicle loans, don’t be too quick to discard those months with traditionally lower sales volumes.  The competition will most likely be less fierce overall and you should be able to bypass discounting your rates and offering costly incentives, which ultimately lower your return.  If you plan to market in high-sales volume months, focus on niche markets to target your message effectively instead of all age groups and other general demographics.