I am the co-founder and president of the nonprofit Consumer Task Force For Automotive Issues and the independent consumer spokesperson for Educators Credit Union.
I am also the author of "Don’t Get Taken Every Time," the book of record on the retail American auto industry.
For over 25 years, I have been a national advocate for consumers in their continuing battle to make wise decisions and conserve money at traditional car dealerships.
Why am I writing this column? The Wisconsin Automobile Dealer Association is doing its best to destroy the one alternative Racine consumers have when it comes to buying a used vehicle: buying a used vehicle from a credit union rather than from a traditional automobile dealership.
Educators Credit Union established their auto and lease program six-plus years ago. It was and is a first in the nation: a car-buying program literally housed in a credit union, and more importantly, a car-buying program based on credit union principles. For six-plus years, the program has operated openly and with the tacit approval of all regulating bodies.
From day one, the Educators used-car program has been a dramatic success: over 3,500 members have purchased vehicles without the usual pressure and confusion associated with traditional car seller. The members have also saved tens of thousands of dollars.
Traditional car dealers don’t like this one bit. They want that money back – as profit for them.
Precisely because of Educators’ success as a used-vehicle seller, the dealers and the dealer association of Wisconsin want the credit union program closed down.
To that end, they have filed a complaint with state authorities. And their complaint may succeed. You may lose this extraordinary alternative as a used-car source.
I believe the Educators Auto & Lease program is the clearest example in the country of how credit unions can (and most definitely should) help their members save money and make wise decisions when it comes to acquiring vehicles and vehicle financing.
Here’s the difference in a nutshell between the Educators’ process and the traditional process:
- The objective of the Educators’ program is to sell and finance to each person at the lowest possible price, regardless of the consumers’ skills at negotiating.
- The objective of the traditional sellers is to maximize their profit on each consumer, regardless of the consequences to the consumer’s pocketbook. Negotiating skills – even at "fixed price" dealerships – are needed at every turn. At dealerships, the principle of Caveat emptor, let the buyer beware, still reigns. Customers are "worked" (that’s the dealership phrase) for higher profits on everything, and mourn your pocketbook if you let your guard down for an instant.
- The Educators’ selling model, because of its reliance on credit union ethics, does not "work" members to ensure a larger profit. No one needs negotiating skills when they buy and/or finance at the credit union
- The difference in the two systems is as different as the proverbial difference in night and day.
And the difference makes a huge, huge impact on the consumers’ pocketbook. Because many consumers are forced or tricked into buying and financing at some traditional dealerships, the consumers’ money flies out the window – and into the dealers’ pockets.
Can we prove that? Yes. Virtually every day, an Educators member refinances a dealer’s car loan at the credit union and that member is handed back on average a thousand dollars in excess dealer finance charges. Does anybody reading this work hard for a thousand dollars? At times, members are handed back $6,000 or more in excess dealer finance charges.
And we’ve only been talking about excess finance charges, not excess profit on the vehicles themselves.
If Educators Credit union is forced to close down their groundbreaking used-car operation, only one group of people will benefit. And believe me, you aren’t one of those people, unless you’re one of those dealers.
Consumers shouldn’t put up with this. If you are an Educators Credit Union member, you know the ethical grounding of that credit union. If you’ve bought or financed a vehicle at a traditional dealership, you’ve felt the pressure and confusion that rules many dealerships.
Do you want to lose the right to choose between these two selling systems? If you don’t, get involved in this issue now. Additional information is available at www.ecu.com.
Remar Sutton is president and co-founder of the non-Profit Consumer Task Force For Automotive Issues, a consumer advocate, and the author of five books, including "Don’t Get Taken Every Time," a detailed looked at the inner working of automobile dealerships. His articles on consumer issues have appeared in thousands of publications, and he has regularly appeared as an auto expert on such shows as "Dateline NBC," "Good Morning America," "20-20," "60 Minutes," "All Things Considered," the "TODAY Show" and CNN.