Consumers aren’t financing recreational vehicles like they did a decade ago. This shift is reshaping the lending process, and credit unions are in a prime position to support both new and longstanding members through these changes. At the same time, technology can help connect these lenders to dealers, and vice versa, to connect all three stakeholder groups.

Let’s delve into the key trends shaping this evolution and explore how your credit union or dealership can adapt to better serve recreational vehicle buyers.

Embracing the Surge in Online Vehicle Shopping

One of the most significant changes in consumer behavior is the rise of online vehicle shopping. The convenience and accessibility of digital platforms have led consumers to explore and finalize their purchases online.

Online purchases contributed to 14.8% of the entire retail market in 2022. If recreational vehicle purchases go the way of the consumer vehicle market — which sees 95% of buyers starting their purchase journey online — the demand for online interactions will impact where buyers do business.

To align with this trend, you need to establish a robust digital presence.

For credit unions, this means offering online credit applications and ensuring transparent approval decisions. By embracing the digital shift, you cater to members who prefer the ease of online transactions, making the lending process seamless and efficient.

Additionally, your specialty dealership may not feel pressured to fully digitize the sales and F&I process remotely, but it is important to reduce manual processes where possible. Customers expect digital signing tools and records of contracts or applications, and it saves you time compiling and submitting loan paperwork. It also reduces the risk and money involved in storing and shipping deal documentation.

Addressing the Fluctuation of Consumer Purchasing Power

Today’s consumer faces a unique challenge when assessing their financial situation, primarily due to the fluctuation in Manufacturer’s Suggested Retail Prices (MSRPs) and interest rates. After the material shortage and rising demand for recreational vehicles during COVID, prices soared. In 2024, many dealers anticipate prices will drop, but interest rates for recreational vehicles vary dramatically, with some lending sites listing ranges between 7% and 36%!

When these prices and rates are paired with a growing consumer sentiment that their income doesn’t stretch as far as it once had, potential buyers are interested but wary.

To empower your members, focus on providing financing options early in the process. This proactive approach enables consumers to navigate the market with confidence, knowing their financial parameters and making informed decisions. By offering clarity on financing options, your credit union becomes an invaluable partner in helping members secure loans for their dream recreational vehicles.

Informed customers are better equipped to have intelligent and productive conversations during sales and F&I, and as a dealer, you can be more confident closing deals with these customers.

Prioritizing Trust in Business Partnerships

In an era where consumers scrutinize the businesses they engage with, trust is an important part of doing business.

Credit unions, with their longstanding relationships built on trust and member well-being, are often already ahead of the curve in this trend. Members are likely to turn to you not only for loan options but also for recommendations on trustworthy dealerships. Leverage your unique position to vet and endorse businesses, providing members with a sense of security in their purchasing decisions.

Dealerships don’t often get the same benefit of the doubt. But if your dealership strives to engage in transparent, honest, and compliant sales and F&I processes, those same trusted credit unions can confidently recommend members who are ready to buy.

This connection between buyer, lender, and dealer establishes trust and more confident, positive experiences.

Tailoring the Lending Process for Recreational Vehicle Loans

These emerging trends underscore the need for your business to adapt and tailor your lending processes to cater specifically to members passionate about recreation. By understanding the shifts in consumer behavior and proactively addressing their financial concerns, you can position your credit union or dealership as an indispensable ally in helping members secure loans for their desired recreational vehicles.

A strong partnership between dealerships and credit unions is key. Whether offering access to loans through an indirect lending program or linking dealership inventory to an online loan qualification process, pre-approving the member before they arrive at the dealership eases the lending process overall.

The evolving landscape of recreational vehicle loans presents both challenges and opportunities for credit unions and specialty dealerships. By embracing digitalization, offering transparent financing options, and prioritizing trust in business partnerships, you can navigate these changes successfully and continue to be reliable partners for your members’ recreational pursuits.

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