Protecting Your Credit Union's Auto Loan Collateral

Credit unions face many challenges when it comes to growing auto loan volume – especially contending with loan delinquencies and repossessions. According to Experian Automotive’s State of the Automotive Finance Market report released recently, there’s both good and bad news for lenders.

Both vehicle repossessions and delinquencies for finance companies are up 1.23 percent to a rate of 2.84 percent for the last quarter of 2013. This is the highest rate recorded since Experian started tracking the date in 2006. Also, the average charge-off amount for auto loans gone bad increased from $7,277 in Q4 2012 to $8,520 a year later.

Want some positive news? Auto loan balances were at an all-time high since Experian first started reporting the data eight years ago. Auto loan balances are at$782.9 billion, up $103 billion from the third quarter 2012.

While finance companies tend to be the hardest hit with delinquencies, credit unions and other financial institutions also feel the impact. Auto lenders have to do extensive research to analyze and understand the risk in each and every loan. And if the loan becomes delinquent and repossession is necessary, it can sometimes take a while to locate the vehicle in question.

Connecting Technology to Auto Loan Collateral

CU Solutions Group has recently teamed up with Spireon and Sprint to offer credit unions an effective solution in their battle against delinquencies and repossessions. It’s the ultimate bridge between technology and your credit union’s auto loan collateral. Spireon’s LoanPlus CMS is a GPS-based collateral management system that allows credit unions to capture a wealth of real-time data about their automotive collateral’s location, movement and status, then leverage this data to improve member services, collateral management and collections.

LoanPlus CMS can also help improve your members’ loan payment behavior by discretely notifying them when their payments are past due. And it works, financial institutions utilizing LoanPlus CMS have experienced up to a 50% reduction in the number of repossessions and up to a 40% savings in the cost per repossession.  Plus, the latest generation of LoanPlus CMS runs on the Sprint 3G nationwide network. All of these benefits combine will help ensure that your credit union will keep auto loan delinquencies and repossessions at a minimum.

Click here to learn more about Spireon’s LoanPlus CMS.