Credit unions have worried for a while that the next generation of members isn’t coming in fast enough. But here’s another challenge: What if the next generation of members aren’t interested in auto loans?
The Los Angeles Times reports on J.D. Powers findings that show young adults are reconsidering the car-owning institution altogether. The firm suggests that decreased interest (which is alluded to, but not quantified in the story) could be due to the tough economy and the explosion of social media, which decreases the importance of physically congregating. Japan, with an urban population and expensive gas, is “demotorizing,” and America could follow. After all, in a country with more registered cars than registered drivers , where else can you go?
In the short term, credit unions rightly focus on maintaining and reinvigorating traditional auto lending. But just as auto lending very gradually became a credit union mainstay, some new loan product may need to be the next growth engine.
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Generation Y is completely different than any previous generation. And they will not act like previous generations. Rising gas prices will also put addidtinal strains on young people and their pocketbooks. In addition to developing new loan products for Generaiton Y, credit unions can also get more loans from Boomers (who will continue to borrow well into their retirement years) and deepen relationships with Generatin X (who are in thier prime borrowing years). And finally, don’t be afraid to loan to young folks with little or no credit.
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