Navigating Refund Complexity in a Record-Breaking Auto Market
The auto dealership buy/sell market is experiencing unprecedented activity, with 330 dealership transactions and 544 franchises sold in just the first nine months of 20241. While these numbers reflect industry growth and consolidation, they also present unique challenges for credit unions and their members—especially when it comes to processing timely and accurate refunds on aftermarket products like GAP and Vehicle Service Contracts (VSCs).
In this era of rapid change, credit unions have an opportunity to reaffirm their commitment to community and member well-being by addressing these challenges head-on.
A Perfect Storm of Complexity
This record-breaking dealership turnover creates ripple effects across the auto financing ecosystem. For members, life events like early loan payoffs, trade-ins, total loss claims, and defaults already complicate the refund process for GAP and VSCs. Add the complexities of dealer transitions, varying state regulations, and fractured communication channels between lenders, servicers, and dealers, and it’s easy to see why members might feel lost in the shuffle. And this doesn’t even take into account the anticipated refinance wave.
When dealerships change hands, vital records may not always transfer seamlessly, leaving members at risk of delays or errors. Cross-state transactions further muddy the waters, as refund requirements can differ significantly depending on local regulations. Now is the time to advocate for your members and ensure that refund processes remain smooth and transparent, even amidst industry upheaval.
Credit Unions: A Trusted Partner in a Changing Landscape
Unlike larger, profit-driven institutions, credit unions are rooted in community and focused on member impact. This philosophy uniquely positions credit unions to help members navigate the complexities of aftermarket product refunds during dealership transitions.
Why Strategic Partnering for Refund Management Matters
- Streamlined Processes for Member-Centric Service
Third-party platforms designed to manage the refund process offer centralized solutions that connect credit unions, dealers, and servicers. Automation minimizes errors, ensures compliance across state lines, and provides members with a transparent, hassle-free experience. - Enhanced Communication and Member Trust
A dedicated partner can handle proactive communication with members, helping them navigate how dealership changes affect their aftermarket products. Clear and timely updates about refund eligibility and timelines build trust and ensure members stay informed. - Strengthened Local Partnerships
Third-party expertise allows credit unions to focus on fostering relationships with community-focused dealerships while maintaining consistent service for members. By managing the operational complexities, these partnerships help credit unions support local economic stability and uphold their commitment to community advocacy.
Community Matters More Than Ever
As the Top 150 US Dealership Groups grow their market share, credit unions must prioritize local communities. Partnering with a trusted third-party servicer simplifies refund complexities, ensuring compliance and timely results while keeping the focus on member needs.
Timely refunds aren’t just about compliance—they’re about trust. Together, through innovative partnerships, we can navigate challenges and keep communities at the heart of every decision. After all, what’s good for the community is good for everyone.
This content was first featured with CUToday.