One of the biggest threats to credit unions and banks when it comes to gaining more direct auto loan business is auto dealers. After all, dealers have a captive audience and use various sales techniques and tactics. You know you are losing loan volume to auto dealers.

So what can you do to counter that threat? A recent study from Crowdtap suggests the importance of social media. Insights from the Crowdtap study reveal the following:

  • 68% of those who purchased a car found the vehicle on social media
  • 87% say they research cars via social media
  • 80% say they’re ‘more likely to turn’ to social networks than sales people
  • 95% say they ‘would talk about’ car models they like on social media

In other words, social media is now trumping car dealers when it comes to the car buying process.

Matthew Scott, SVP of Strategy & Business Development for Crowdtap said in a recent Bizreport article, “Media-empowered consumers—who increasingly rely on the opinions of their peers to inform buying decisions—are flipping the automotive advertising model on its head. Auto brands that are able to steer the power of peer endorsements and social sharing will find success in marketing’s people-powered future.”

So if social media is changing the car buying process for consumers, what can your credit union or bank do to leverage social media when it comes to auto loans? Here are a few ideas:

  • Use social media channels to educate consumers about buying a car—People are obviously turning to social media when it’s time to buy a car. Rather than put all your car buying information on your website, weave content onto your Facebook page, your Twitter feed and your YouTube channel. Consumers crave information about buying cars. So provide that information where they are: on social media.
  • Engage members/customers about their new cars on social media—Web 2.0 is all about engagement. People don’t just want you to blast them with marketing messages. They want to engage with you. So conduct a social media campaign where you encourage your target audiences to post pictures of their new car on Twitter or tell a story about their new car on Facebook. For an example of a financial institution using social media as an engagement tool to drive loans, check out this article from The Financial Brand.
  • List your repos on your social media sites—As the study noted above, 87% of consumers say the research cars via social media. So don’t just list your repos on your website. You might miss some potential buyers. Put that information on all the channels you are using.
  • Provide auto-buying tools on social media—One of the plusses that comes with social media is giving consumers tools and information (not just a sales pitch). One great tool to use is Calcubot. It is an application that takes consumers through an interactive buying process and one you can use on your Facebook page. One plus: you can customize Calcubot to your credit union or bank.

Both social media and banking are about trust. Establish that trust by using your own social media channels to drive information (and subsequently loans) to your financial institution