Financing neighborhood electric vehicles
South Bay Credit Union partners with dealer to offer auto loans for street-legal golf carts.
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As the Chevalier family spent much of its time at home due to the coronavirus pandemic, their car rarely left the driveway.
They decided to look into their transportation options. According to South Bay Credit Union President/CEO Paris Chevalier, the search for an alternative vehicle led to a new partnership and lending option for the $130 million asset credit union in Redondo Beach, Calif.
Over the past two years, Chevalier noticed an influx of neighborhood electric vehicles (NEV) or micro-mobility electric vehicles. As she saw more street-legal golf carts, she realized they weren’t solely recreational vehicles.
“They're street legal, they've got sound systems, they've got seat belts,” says Chevalier, a member of the CUNA Marketing & Business Development Council Executive Committee. “It's a lot easier to go in and out of our neighborhood with them. So, we decided to sell my husband’s car and get a low-speed vehicle.”
Chevalier picked out a golf cart, asked about financing it, and found the local dealer partnered with an out-of-state third party with relatively high interest rates. She felt the loan wasn’t categorized correctly for the way people often use golf carts in Redondo Beach.
“These are often financed as recreational vehicles, which have a much higher rate,” Chevalier says. “But many people drive them as their primary vehicle.”
South Bay determined it could finance the carts for less than 4%, so Chevalier approached E3 Vehicles, which sells new and used golf carts, about a partnership. The credit union now offers traditional auto loans for NEVs from E3 Vehicles.
“We're the official finance partner for these vehicles,” Chevalier says. “We're fortunate to have a board that's always pushing us toward innovation. So, we're always looking for new and innovative products and services that are viable and sustainable for our members, as well as an environmental purpose for our community.”
NEVs range in price from $9,000 to $30,000, travel up to 25 miles per hour, have a vehicle identification number, and meet federal motor vehicle safety standards.
Drivers must have a California license and operate the vehicles according to state law. It takes five to eight hours to charge the vehicles using a 110-amp outlet that can be found in a typical home.
Chevalier says micro-mobility electric vehicles are growing more popular because they are cheaper than cars, provide lower fuel costs, avoid harmful carbon emissions, take minimal maintenance, and are easy to park.
“If people want a low-speed vehicle that doesn't have emission, let's put loans in their hands,” Chevalier says, noting that not all communities allow low-speed vehicles on public streets. “We anticipate it could be a trend in the near future, especially with high gas prices and as we're trying to get to zero emissions in California. We’re ahead of the curve.”
