ST. LOUIS — With the economy driving down prices on used vehicles at auto auctions, Gateway Metro FCU moved to sell its repossessed vehicles itself. The result? An additional $39,000 in revenue since March.

"We were only getting about 38% of our used cars' values," said Gateway SVP Larry Pixley. "So we said let's try to sell the cars ourselves online."

It started out fairly simply, according to Pixley, with a few cars on the credit union's website. But then members started calling about the vehicles. "The more people who called and the more cars we sold allowed us to improve the site. We put more cars on it."

The credit union now dedicates two staff members to handle inquiries, which also come from local auto dealers. Pixley said Gateway has been able to recover some of the losses suffered from auto loan defaults, which had been coming in at about 10 per month. The extra revenue resulting from the sales-and savings from not having to pay auto broker commissions and storage fees-has allowed GMFCU to avoid having to adjust loan and deposit pricing and add fees to make up the deficit.

Gateway even secures much of the financing again, offering a 3.74% used car loan rate for a 5% downpayment, or 3.99% without, Pixley said.

Members view the cars online, and then see them in person at a lot Gateway owns on the south side of St. Louis. When members become "seriously interested," the $184-million CU brings the car to the closest branch. Cars sell at Kelley Blue Book's Private Party value. If car sits for a while, prices are reduced. Members go to, click on "Vehicles for Sale" in the lower left, then advance to a page where cars are classified into three categories: "Quality PreOwned," "Well Used," and "Fixer Uppers."

"I was very surprised at the fixer-uppers. They have moved well," explained Pixley, who said members have the handyman specials-which do not run-towed off the lot. "The bodies are good. So someone who may be able to install an engine and do other work themselves gets a good vehicle. I take a car like this to the auction and I am lucky to get $100."

At press time Gateway had three fixer-uppers advertised, at an average price of $1,300 each. Overall, GMFCU had 14 cars on the site, which had moved 25 cars since March. The site lists each car's mileage, key features, VIN number, and gas mileage. Numerous photos rotate through to show the car from different angles and its interior.

Members first learned about the program through an e-mail blast when the effort began, and are reminded through the CU's newsletter. Pixley said costs to run the program are "very small." Including limited employee time-those assigned to the program pick up the car sale duties in addition to their existing jobs-and website maintenance. "We do pay $100 to have each car detailed," Pixley added.

When the economy turns around, Pixley said the credit union will keep the program. "I'd advise anyone who is considering doing this to keep the website updated and fresh."

Best Practices CUJ 2009
CU: Gateway Metro
Best Practice: Disposal, Sale of Repossessed Vehicles
Vendor: Internal

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