AMHERST, N.Y. – Auto loans are still the bread and butter for many credit unions, despite increased financing competition. But as any credit union involved with the product knows, many auto loans don't make it to full term. So what happen when a member defaults on an auto loan? How can the credit union minimize their loss on the loan? Most credit unions bring the vehicle back to the CU's lot and try to sell the vehicle to another member themselves, explains Stuart Angert, co-COO, Remarketing Services of America (RSA). The credit union typically puts in about $500 to recondition the vehicle and offers low rate financing, but "by the time a credit union sells the vehicle it might be three to four months. By then the vehicle has depreciated in value. The only one getting a deal is the member who purchases the car because they're looking for a deal," says Angert. "But the credit union isn't making money. "In addition, the credit union is putting itself at risk," he continues, "because they're representing the vehicle as being in shape. But if the car goes out and the driver hits a tree or school bus because of vehicle malfunction, then the driver is going to sue every deep pocket in the world, including the credit union's. We see this happen over and over again." That's where remarketing comes in, says Angert. RSA has relations with 250 auction sites and use about 40 of those sites in any given month. It also has relationships with about 100 credit unions of varying sizes and various levels of auto lending activity. From the time RSA takes repossession of a vehicle to when a credit union has proceeds of a sale in hand is typically 30-35 days, says Angert. "We match dealers to certain cars. We find which dealers are buying which cars and notify them about upcoming auctions. The more people you get to an auction who want specific cars, the more interactive bidding there is. The objective is to generate the greatest price in the least amount of time," he continues," says Angert. "The auctioneer has one goal, to sell the vehicle. We're there to make sure every bid is recognized," he says. What would be impossible for one credit union to do on its own, becomes doable when a company that specializes in dealing with vehicle auctions can bring in hundreds of vehicles repossessed by CUs. "Remarketing is an opportunity for credit unions to improve their profits internally and lose minimal dollars to auto loans. A credit union can't take one car to an auction and expect to get a lot of attention. But we can leverage that because we handle so many cars at any one time," he says. -

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