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9 Things to Consider Before Developing an Indirect Lending Program

One expert says credit unions should look to an indirect auto lending program to grow their lending services.

By Indira Khan | Updated on November 30, 2016

While there are many avenues to capturing auto loan growth, one of the best places to look for expansion is an indirect auto lending program. This channel can produce major results for credit unions looking to drive auto loan growth. One of the benefits of an indirect program is it will help the credit union reach new levels of success. Keep in mind credit union indirect auto loans reached a new high of $282.9 billion in the second quarter of 2016, according to Callahan & Associates, up 14% over year-to-date 2015. Indirect loans financed through credit unions accounted for nearly 54% of total auto loans as of June 30, 2016, up 3% from mid-year 2015. These are impressive numbers and represent a 3% increase over the previous year. Are these numbers enough to motivate greater engagement when it comes to indirect lending? It should.  

When looking to develop a program, there are many considerations. Both servicing the member and increasing your industry footprint doesn’t happen overnight. This is not a venture that can be quickly developed. The better you prepare, the more likely you will be able to compete successfully.

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