If you're one of the nation's 33 million credit union members, you can look forward to a bouquet of new financial services over the years ahead. The credit union movement appears ready to emerge from its deep sleep and bid more aggressively for the consumer-finance dollar.
Although many of their ideas are still in the talking stage, credit unions in several states have started to sell a package of insurance policies and next month will inaugurate a discount buying service for new cars. Assuming these go well, a whole series of discount deals or financial planning services could follow.
Credit unions now write 17 per cent of all the installment loans in the United States, up from 11 per cent just five years ago. But even this is probably less volume than they deserve. Credit unions often offer lower interest rates than banks or finance companies - yet many people qualified for credit union membership never think to join.
In a bid for more auto loans, credit unions will tie in with Car/Puter Inc., a company that helps consumers buy new cars at the lowest possible price.
Car/Puter sells information to the public on what auto dealers pay for the cars they deliver. Armed with that information, you're in a better position to bargain with the dealer for a good price.
You simply write to Car/Puter for its inquiry form, which will ask you to list the make and model of the car, plus all the options. You'll get back a computerized printout showing the dealer's exact cost.The price is $10 per quote, plus $1 for postage. The address: 1603 Bushwick Ave., Brooklyn, N.Y. 11207. Or call toll-free (800) 221-4001 and charge it to a major credit card. (In New York State it's a toll car, (212) 455-2500.)
Starting Feb. 1, Car/Puter's price service will be offered on a pilot basis through two credit unions in Illinois and two in Texas, at a price of $8 a quote (plus $1 postage). With luck, it will be available to credit unions in all states by the end of the year.
Besides giving information on dealers' costs, Car/Puter's printout will note how much the member's own credit union charges for auto loans. On average, credit union interest rates run from 9 to 12 per cent, with new-car loans at the lower end of the range. That price generally includes free credit life insurance.
If you can't bargain the auto dealer down to a good price, you can buy the car through Car/Puter's subsidiary, United Auto Brokers. Most U.S. cars go for a flat $125 over cost.
On the insurance side, a big test will soon begin in Illinois and Indiana, to sell whole-life, paid-up-at-65 policies to credit union members by mail. They're charged in increments of $2 or $4 a week, with the amount of insurance that sum will buy varying according to your age.
Other experimental policies are level term insurance, in units of $10,000; decreasing term, which pays $20,000 up to age 35, then gradually reduced until by age 65 the death benefit is only $1,000; a hospital indemnity policy, that pays costs not covered by your regular health insurance, and a small single-premium term policy for children under 18.
In general, these policies are available where the credit union organization has established marketing groups, in parts of Rhode Island, Illinois, Utah and Missouri. For further information, write to the Credit Union Service Organization, CMCI Inc., Member Marketing Dept., P.O. Box 391, Madison, Wisc. 53701. Credit unions also write auto insurance in more than half the states. At present they are not taking much new business, but expect to open the rolls again toward the end of the year.
One point: Just because it's sold by your credit union doesn't mean it's cheaper. Credit unions are definitely competing with the lower-cost insurance companies, but always compare rates for yourself before you buy.