HOUSTON — Auto Financial Group (AFG), an online provider of residual-based financing products for credit unions, has added extended terms to its DrivingSense program.
AFG’s new extended terms are offered in three-month intervals between regular twelve-month terms. For example, the new extended terms are available at 39-, 42- and 45-months, rather than simply at 36- or 48-months.
The additional flexibility of the extended terms can help both consumers and credit unions in the current economic environment.
"We recognize the challenges in today's automotive finance world and are offering this extended terms program to help our credit union partners differentiate the DrivingSense product from retail offers for the credit union members," said AFG President Richard Epley. "The extended terms give the credit union a way to lower the monthly payments for the credit union member, which is obviously an important advantage to the member as well."
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.