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RepairPal Pilot Program

RepairPal Pilot Program

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If you are anything like me, you don't know a piston from a carburetor. They sound important, and you certainly don't want them to break. And if they do break, you have no idea how much it should cost to fix them. A recent i3 idea may have uncovered why credit unions should care.

Here's some background:
Credit unions have always promised consumers a great deal on automobile financing. Low rates and fair underwriting have helped credit unions capture nearly one in every five auto loans in America. Still, there is a lot more to helping consumers with the cost of car ownership than the loan itself.

The cost of car maintenance and repair can have a significant impact on the overall cost of ownership, a fact that hasn't escaped Filene's i3 teams. A few years ago we floated the idea of a Peace of Mind Auto Loan, which essentially set up an escrow account for borrowers so they could budget for maintenance, repair, and insurance costs. If credit unions are interested in helping members successfully budget, they need to do a better job of helping to identify the true cost of car ownership.

This true cost is unknown because, let's face it…few of us know how much vehicle repairs actually cost. As I pour over study after study from well known research firms, I see average annual expenditures per American car owner as low as $165 and as high as $1,500. The study I trust the most suggest that the average 35 to 44 year old spends $805 on vehicle maintenance and repair each year. This is a huge amount for any family, especially for low to moderate income consumers that credit unions traditionally serve.

But it only highlights part of the problem. How can consumers find a trusted automobile repair shop? How do they know how much to pay for specific repairs? How do they continue to save money on their car purchase through their credit union?

Last year, an i3 team tested a solution with a startup company called RepairPal. RepairPal is a cross between Angie's List and Consumer Reports for automobile repairs. Their experts have figured out how much automobile repairs should cost and which shops you can trust with those repairs. Consumers have already shown that they're interested.  RepairPal's audience has grown to over 1 million/month (1,044k unique visitors in the last 30 days). What we are interested in is how we can help credit union members receive the value of this service, while reaping the rewards of new business, improved member loyalty, and a steady flow of recurring loans. Here are some fun facts from the i3 research: "2 in 3 members want help from their credit union in managing the car purchase and ownership process" and "1 in 2 members want help from their credit union in budgeting for and financing maintenance and major repairs" (5 credit unions, n=651).

In typical Filene style, we want to test this thing out. Here are the details:

What we're studying:
The impact of RepairPal on member satisfaction of credit union automobile loan programs and new loan growth

Why it matters:
Credit unions need new loans. RepairPal is an innovative program to help consumers engage with their credit union to save money on the maintenance and repair of their automobiles.

Who can participate:
We are inviting up to 15 credit unions in select metro areas to participate in this free pilot. Filene members in the following metro areas are encouraged to learn more:

Phoenix, AZ
Los Angeles, CA
San Diego, CA
San Francisco, CA
Denver, CO
Atlanta, GA
Chicago, IL
Boston, MA
Baltimore, MD
Minneapolis, MN
Raleigh, NC
Winston-Salem, NC
Las Vegas, NV
Charleston, SC
Houston, TX
Dallas, TX
Seattle, WA
Washington, D.C.

Watch the Pilot Kick Off Webinar:

 

Watch the introductory webinar:

 

Sign Up:
Sign up for this Pilot

 

Presentation Slides:

Categorized: 'Products & Services' 'Strategy'

Comments on this Post

Please, please, PLEASE make this happen!

I’ve been toting around a concept similar to the “Peace of Mind” loan for years—a LOC attached to a car loan for repairs (total payment stays the same throughout—if you don’t use the LOC, you pay off the car 6 months early).

Brought it up many times with many CUs, with zero results—“Who would want that?” “Why can’t they just use their credit card?”.

If you could tie this to trustworthy repair shops it would just add sooooo much more value and make it even more “credit uniony”.

Great way to think beyond the rate—CUs have so many opportunities to improve lives beyond slashing loan rates.

Jen & Matt— Great webinar launch of the program this morning.  Especially since RepairPal CEO Art Shaw spent so much time on the call…that means RepairPal is committed to this initiative.  And the fact that Art spent so much time explaining how he was “personally” committed to making sure members were provided with direct access to the RepairPal “leadership” for any problems, is HUGE!  Can’t beat that!

For those who don’t know, RepairPal is one of the hottest Silicon Valley things going in online automotive service innovation as evidenced by the recent investment of 13 million in RepairPal by Cars.com! http://www.cars.com/go/about/us.jsp?section=P&content=rel&date=20130211

Hats off to Filene and Matt Davis for recognizing this great opportunity.  CUs have concentrated on “car buying” and have ignored helping their members with car “ownership”...car care, it you will.

I blogged about this in Nov 2011 http://tinyurl.com/advesde

One critical stat that everyone knows but very often ignores is that WOMEN make up the majority (65%) of all vehicles brought in for service.  (and that stat is old so it’s probably even higher now).

A shop that is proactively “women friendly”, will exceed the expectations of everyone else! That’s what I call a TOP SHOP!

Totally agree, Jon. A combination of the loan idea (basically an escrow account for car maintenance/repairs) and this technology is pretty intriguing. Ultimately, we could help consumers plan for the cost of upkeep, avoid getting ripped off, and get a great loan rate all at once.

Several years back a i3 team developed a loan that included not only the cost of the car loan, but the cost of insurance, estimated car repairs, and a savings component for the next down payment all rolled into one loan payment.  It was called the “Peace of mind” auto loan.  Maybe that concept should be reviewed again in light of this development.

Thanks for the comment, Harmony. This was a concern of mine, too. I found out that RepairPal constantly monitors Top Shops to make sure they are keeping up to their standards. They even monitor phone calls and client comments to make sure that complaints are kept to a minimum. In many ways it’s like Consumer Reports for repair shops.

Great concept.  A trusted mechanic is worth his weight in gold.  What a valuable resource for members.  A concern would be keeping this resource current for members.  A shop that was once recommended could change hands or status from good to bad.

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