Car Buying Serivce Autoland Acquired by Zag, CUs to Gain State-of-the-Art Technology Platform

SHERMAN OAKS, Calif. – Call it a marriage between veteran and newcomer. Autoland, which has worked exclusively with credit unions since 1971 and is one of the largest credit union auto buying services, was acquired by Santa Monica, Calif.-based technology company Zag, which has been in business for less than a year and has never worked with credit unions. While some people may consider that an odd combination, Autoland CEO Ron Frey says it’s a perfect match. “Zag’s mission is to dramatically improve the way consumers buy cars. They’ve developed state-of-the art technology and a service platform that enables affinity groups to deliver a better car buying experience to consumers. In many ways their platform is very similar to Autoland’s,” he said, emphasizing that Autoland wasn’t on the market for a sale. “Zag approached Autoland,” said Frey. “They’ve been building out and designing a very unique operating system. Because of our unique technologies and delivery system that have provided Autoland the ability to develop online consumer auto sites that we’ve connected to more than 300 credit unions on the West coast, Zag felt they wanted to be able to leverage that expertise to be able to deliver faster on their business plan,” Frey explained. Under the terms of the sale, which was finalized in early October and were announced Nov. 11, Autoland will operate as an autonomous unit of Zag, and Frey will continue in his CEO position as will other management positions. “For Autoland it’s very much business as usual,” said Frey. Actually Autoland’s relationship with Zag pre-dates the company’s acquisition. Frey explained that Zag CEO and founder Scott Painter was a co-founder and CEO of CarsDirect.com which Autoland “incubated” when CarsDirect.com first got started six years ago. “So there’s a lot of familiarity between our two companies,” said Frey adding that he and Painter worked together during the early days at CarsDirect.com. Zag says its automotive transaction platform will enable Autoland to provide participating credit unions with an even easier way to allow their members to complete their entire transaction online – from initial purchase support to credit union loan processing to aftermarket extras and insurance. “We know Autoland well and have long recognized that it’s a model in the credit union space for where car buying must go,” said Painter. “Autoland’s dedication to complete customer satisfaction is aligned with our vision that car buying should be pleasant, straight-forward and hassle-free. Autoland will continue to be a pioneer in realizing this vision. Zag brings the resources, the nationwide reach and the cutting-edge technology that will enable Autoland to offer even more value to its credit union partners and their members.” Founded in 1971, Autoland represents more than eight million credit union members and partners with hundreds of credit unions. The company sells more than $270 million in vehicles per year. While Autoland’s credit union relationships are currently focused on the West coast, Frey said Zag’s automotive transaction platform will help Autoland expand its geographic reach, providing the company with additional purchasing power that, in turn, will enable credit unions to deliver even better pricing and wider selection their members. He emphasized, though, that “Autoland has no short term plans for expansion. We see this acquisition as an investment for the future.” Citing data from Jupiter Research that show 82% of new vehicle purchases in the U.S. are preceded by shopping and research online, Frey said, “Consumers are flocking to the Internet to better educate themselves to make informed decisions. Consumers are not only going online to research and shop for cars, they’re also transacting online. Our goal is for our credit union partners to provide a high level of information for members to use to gather that information instead of their members going to other sites. Because when members do that they also get financing from those sites, and credit unions miss their mark. “The platform also gives credit unions the opportunity to reach out to their members and provide them high value and stay in touch with those members who choose to buy a car and then give members choices on how to shop and help them make informed choices. The member chooses how they want to do business on as platform that’s designed for their benefit,” said Frey. He added that the combination of Zag’s best-in-class technology and Autoland’s position as the industry’s leading auto buying service will help credit unions further differentiate themselves from other financial institutions as they compete for their members’ auto loan dollars. -