However, Jack Schmidt, principal of Jack Schmidt and Associates, a dealership financial consulting firm, said Adventure Subaru in Painesville, Ohio, had been able to manage the competition from credit unions by focusing on F&I products.

Adventure Subaru, where Schmidt has a financial role, doesn’t try to dissuade the customer from using a credit union. Its F&I pitch instead seeks to have the customer add a service contract, guaranteed asset protection and maintenance plan to the order the buyer will take to that lender.

“And then they’re told, ‘So if we do it this way, you can put it in with your loan with your credit union,’ ” Schmidt said in February. “And we’ve had considerable amount of success doing it that way.”

Schmidt called credit unions receptive to financing the coverages on direct loans.

Thomas Castriota, dealer principal of Castriota Chevrolet in Hudson, Fla., called credit unions “very strong” in his Tampa Bay-area market.

Castriota handles the competition from that segment by asking customers who wish to finance with a particular credit union to do so in an indirect loan handled by the retailer rather than go directly to the lender. That way, Castriota Chevrolet receives the deal funding more quickly.

“We find that to be pretty successful,” he said. “I would tell you that works probably 9 out of 10 times.”

This strategy might sacrifice dealership reserve to match the direct rate, but it offers the store the convenience of faster funding and the ability to control the deal, Castriota said.

“You would rather the consumer being with you than to walk out the door saying, ‘I’m taking this to my credit union,’ ” Castriota said.

Bob Parry, finance director at Tyrell Auto Centers in Cheyenne, Wyo., said his group has found success partnering with credit unions on indirect loans.

“The customers are gonna use them, so why not use them?” he said.

Parry said Tyrell’s credit union partners will finance the retailer’s F&I products and pay the store a “flat” for arranging the deal.

“We can still make money using the credit unions,” he said.

G.P. Anderson, finance manager at Thielen Motors in Park Rapids, Minn., said he told his sales staff to make sure the dealership still has an opportunity to present its financing options to a credit union customer. But he doesn’t make the conversation adversarial or encourage the customer to take a higher rate and refinance later.

Anderson recalled trying to overcome a credit union’s 5.49 percent interest rate on a 36-month loan to a customer with good income and excellent credit. He sent the deal out and was able to obtain a 6.2 percent rate. But when the customer checked with the credit union — at Anderson’s encouragement — he discovered another 0.25-point discount was available.

Anderson said he told the customer: “That’s a great rate. Go ahead and do that. I can’t even get close to that.”

But he was able to still sell the customer a service contract and tire-and-wheel protection.

“The thing about it is you control what you can control, and you can’t control what you can’t control,” Anderson said.

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