Bucking the national trend of tight credit, Berkeley's 67-year-old Cooperative Center Federal Credit Union has agreed to finance 100 percent of the purchase price of a ZENN electric car at Berkeley's Green Motors with fixed interest rates as low as 5 percent for those with good credit.
"We felt it was good for the environment and good for consumers as well," said Gary Bell, the 12,000-member credit union's chief executive, buzzing with enthusiasm over the program along with other colleagues at the financial institution.
Credit union members swarmed a gleaming gray ZENN electric car after Marc Korchin, owner of Green Motors, backed the demonstration model into the credit union's lobby near Ashby Avenue in Berkeley, guided by Bell.
The ZENN costs around $19,000 at Green Motors. Government rebates of some $2,000 are available and Korchin is offering a $1,000 rebate through the end of March.
"I heard there were problems with the Pinto in the 1970s," a UC Berkeley student in the lobby told the pair, referring to that car's notorious exploding gas tank. "Would there be problems like that with this car?" "Since there's no gasoline and nothing combustible, absolutely not," Korchin told the student. The ZENN car, manufactured in Canada, runs solely on electricity, charging in about four hours using an ordinary extension cord and wall outlet. It will go approximately 35 miles between charges, with a top speed of 25 mph to 35 mph, and according to Korchin, costs less than his monthly cable bill to run.
"The cost of operating a ZENN is just over two cents per mile," Korchin said. "Fuel efficiency is the equivalent of 245 miles per gallon." Since there is no gasoline and no combustion, the car generates almost no polluting emissions, he said.
Myers' family would use the ZENN as an around-town car for buying groceries and the like, she said. "Starting and stopping often is a problem," Myers said, referring to the fact that cars generally emit the most pollution on a cold start.
"The credit union's financing would make this doable for us," Myers said. Most people are eligible for membership in the credit union, either by virtue of living in Berkeley, belonging to groups covered by the union or making a $1 donation to Berkeley's Chamber of Commerce.
Interest rates will vary depending on individuals' creditworthiness, but a member with stellar credit purchasing a ZENN in the $19,000 range with a 5 percent interest rate could conceivably end up with payments of $311 a month for 72 months, said Joan Griffith of the credit union.
Getting financing for car purchases has grown far more difficult; vehicle financing is down 32 percent compared with a year ago, according to Experian Automotive. Credit unions like Cooperative are becoming safe havens for borrowers as big banks take a beating and car loans become harder and harder to get.
"At this point the credit union industry is solid," says Karen Dorway, president and director of research for BauerFinancial, a firm that analyzes banks and credit unions.
"Credit unions do have a lot of available money for financing, and they're not as bad off as some of the larger banks, so they are able to offer financing to a lot of their members," said Chinton Talatai of online auto site Edmunds.com.
"Credit unions are emerging as one of the first places to look when financing a vehicle," Talatai said.