HOUSTON — Auto Financial Group, an online provider of residual-based financing products for credit unions, struck an agreement with Frankenmuth Credit Union, which will allow FCU to offer AFG’s DrivingSense as both a direct and an indirect lending option.
DrivingSense is an auto financing product that offers the lease-like benefits of a balloon loan to credit unions and their members. It allows credit unions to “build” a vehicle for their members, compare payment terms with conventional loans, and offer their members lower payments (often as much as 40 percent lower), flexible two- to six-year terms, actual ownership of the vehicle and several end-of-term options.
DrivingSense removes the financial risk to the credit union by guaranteeing the predetermined residual value of the vehicle through third-party insurance, as well as handling the vehicle’s disposition at the end of the term. AFG is paid one low administration fee for each DrivingSense loan, while the credit union earns all the interest. Credit unions are protected while building an important relationship with their members.
FCU handles over 21,000 members across the Great Lakes Bay Region in Michigan, with more than $197 million in assets and $169 million in loans.
“DrivingSense appealed to us as something totally different than most of what's out there,” stated Greg Wischmeyer, vice president of lending at FCU. “It completely fits the credit union mantra of 'people helping people' and is a very affordable program — especially for our members who are looking at higher-priced cars."
“We are excited to be working with FCU and expanding our presence in Michigan,” said AFG President Richard Epley. “We look forward to providing their credit union members in this part of the state with lower payments and to helping train local auto dealers in the program.”