The Pandemic’s Impact on Auto Lending & Driving Digitization

Consumer lending executives from Golden 1 Credit Union discuss the measures they took to adapt to COVID-era auto lending.

When the COVID-19 pandemic first hit the United States, no one knew how the economy would be impacted, especially the auto industry. In February 2020, China experienced a dramatic 80% decline in overall automotive sales. To prevent a similar, disastrous decline in the U.S., rapid change was needed to continue to engage buyers, secure loans and keep the industry alive.

At Golden 1 Credit Union, we recognized the significant challenges facing the auto industry, but due to an increased focus on digital that the credit union had already enacted at the start of 2020, we were poised to make a rapid and smooth transition to a remote workforce and a digital auto lending experience.

Relationships With Members

When the shelter-in-place orders were first issued in California, Golden 1 worked with its information technology department to swiftly enable the majority of our teams to work remotely. Within a very short timeframe, 95% of our lending department was set up from home.

We streamlined the process to fund loans faster and took advantage of the opportunity to move to a more paperless environment by offering a virtual experience. A centralized back-office team helped with the increase in digital adoption. Most of the documents that required signatures were provided via DocuSign and the lending team was able to virtually walk members through the process. The digitization also led to less time spent in a branch. With digitization and fewer documents requiring wet signatures, the process could get members in and out of the branch in about 30 minutes, limiting the time they had to spend outside their home.

Throughout the pandemic, we’ve continued to fine-tune our services and adapt as a team. We remained laser-focused on each other and our members. We looked for mission critical areas and rallied around each other to make sure we could provide exceptional service while keeping our employees and members safe.

Relationships With Dealers

A key driver of our relationships with our dealers is frequent face-to-face meetings between our dealer relationship managers and the auto dealers themselves. With varying degrees of COVID-19 restrictions throughout California, we significantly modified the way Golden 1’s 16-member production team communicated with more than 1,000 dealer partners. That meant changing the way we serviced our dealers, leading to more remote interactions via phone calls, emails and text messages.

The team maintained call logs and follow up logs to track all communication. We also remained diligent on our service commitments to dealers, which proved successful. Many dealers turned to us when they couldn’t get in touch with other lenders. The paperless environment Golden 1 enacted for members proved to be efficient with dealers as well.

As the dealers have also transitioned to a digital environment, they have become more comfortable with email, phone and text interactions as well as digitizing the buying process on their end, leading to less time for a buyer to spend in the dealership.

Service With a Smile

Throughout 2020, Golden 1 pivoted, adapted and became more nimble. Member and dealer satisfaction scores show our service prevailed. Here are some key takeaways that can help other credit unions succeed during and after the pandemic:

  • Digitize as much as you can – electronic delivery is the key to efficiency.
  • Be available – have hours amenable to dealer partners as well as branch partners and members.
  • Collaborate with partners on their needs – evaluate what is working well and what could use improvement.
  • Analyze operational changes – look at the practices put in place throughout the pandemic and see which may become best practices going forward.
  • Leverage your partnerships – you can do more together than you can apart. Use partners to help accomplish your goals, such as using vendor partners for collection and deferment or to get paper packages delivered.
  • Service – double down on providing the best member service possible.

Adapting for the Future

Although 2020 was a year of unprecedented challenges, Golden 1 served more members than ever before. Post-pandemic, we will continue with a hybrid approach to serving our members and working with dealers. Our digital channel adoption was already a strategic focus area, but the pandemic certainly accelerated those efforts.

We know face-to-face communication helps build long-lasting relationships and is a critical aspect of auto lending. We expect our relationship managers to return to more in-person interaction once it is safe to do so, but it will be different. Calls, texts and emails will continue to complement face-to-face interactions to sustain and grow dealer relationships.

As the U.S. gradually returns to a redefined state of “normal” in the coming months, credit unions should prepare to provide continued flexibility and support a more digital lending experience. This readjustment will enable us all to be better prepared to deal with unanticipated auto lending trends in the future.

Wendy Micel

Wendy Micel is Vice President of Consumer Lending for the $16.3 billion Golden 1 Credit Union in Sacramento.

Ryan Little

Ryan Little is Vice President of Consumer Lending for Golden 1 Credit Union.