UW Credit Union Links With Carvana

Wisconsin residents buying a used automobile through Carvana’s online service are now able to find UW Credit Union as a lending option through the site.

Carvana serves the Madison and Milwaukee markets with an inventory of more than 19,700 cars. Prices are set. Even though buyers can’t touch the cars, Carvana’s site has elaborate photography that allows 360-degree viewing and a free Carfax vehicle history report. 

“Carvana provides peace of mind,” said Josh Fetting, the credit union’s sales manager for consumer lending. “You can browse an extensive inventory of high-quality, pre-owned vehicles 24 hours a day, secure your financing through UW Credit Union right on the same website and even have your vehicle delivered directly to your doorstep. It relieves a whole lot of stress.”

UW Credit Union, Madison, Wis. ($3.2 billion in assets, 274,316 members) held $504.8 million in used auto loans as of Sept. 30, up 26.6% from a year earlier. New car loans rose 22.8% to $140.8 million, and total loans rose 14.7% to $2.4 billion.

For all credit unions, used car loans grew 5.4% to $233 billion, while new car loans grew 2.4% to $149.9 billion.

Carvana‘s sales have more than doubled every year since 2016. Its sales from January through September were $2.8 billion, up from nearly $1.4 billion in the first nine months of 2018.

Carvana has expanded its network of lenders in the last few years, and includes many credit unions. 

However, Carvana is increasingly emphasizing its proprietary online lending platform as part of its vertical integration business model. Carvana originated and sold $473.6 million in loans out of $755 million in revenues in the first quarter. It typically sells all loans it originates in house to financing partners after its 7-day trial period ends.

Carvana sells only newer used vehicles with lower mileage, full transparency of vehicle condition, cars with no accident history or structural damage, and processing of each vehicle through an inspection from tread tire depth to thickness to paint quality.

Vehicles carry a limited warranty for 100 days, or 4,189 miles, as well and a 7-day money back guarantee that allows members to return or exchange their vehicle for any reason.

“You not only get to test drive the car,” Fetting said, “you get to test own it. The 7-day return policy gives you a week to see if your car truly fits into your life. If it doesn’t, you simply return it. This is pretty much unheard of.”

UW Credit Union helps members through the education process of buying a car through Carvana. Then, when ordering the vehicle online, the credit union provides a credit approval on the spot and secures financing. 

Cars are delivered to a buyer’s door or, in Milwaukee, can be picked up at an on-site Carvana “vending machine” — tall, glass-sheathed parking garages with elevators and machinery that picks out a car, and carries it down to the buyer with a mechanical flourish.

Carvana now has 23 of these vending towers in Tennessee, Texas, Florida, Maryland, Arizona, Ohio, Pennsylvania, Indiana, Illinois, Missouri, North Carolina, California and Oklahoma. Its newest one opened this month in Memphis.

For customers far from a tower, the company subsidizes $200 of airfare for a one-way flight for a car pickup. Carvana also offers trade-ins with pickup of the vehicle.