Many credit unions struggled to grow auto loan balances in the first quarter. Credit unions may be picking up lending momentum in the second quarter. In April, credit unions captured 13.8% of the auto lending market, the highest market share level credit unions have seen in 2008. Although this is down from the 14.5% credit unions captured in April of 2007, it is an increase of nearly a full percentage point from March results.
Credit union auto lending continues to slow through the first quarter of 2008. Callahan & Associate's First Look program has collected data from credit unions totaling $281 billion in assets, representing about 36% of total industry assets. For these First Look credit unions, total new and used auto loans outstanding fell by 50 basis points for the 12 months ended in March.
This drop reflects the sluggish auto lending market that led to credit union loan balances falling slightly in 2007. Auto manufacturers are also seeing a slowdown in 2008, with light vehicles sales falling 7.7% year-to-date as of April. Growth in used auto loans outstanding is being more than offset by a decline in new auto portfolio. At the end of the first quarter of 2008, used auto loan balances increased by 3.0% from the previous March. This was offset by a 3.3% decline in new auto loan balances.
This growth may be due in part to members looking for lower priced vehicles as the credit crunch and slowdown in the housing market may have affected their ability to make higher payments. Car sales have increased 5.2% in April, while sales of light trucks and SUVs fell 17.4% from the previous April. While credit union auto loan balances may have fallen slightly during the year, members continue to turn to their credit union to secure an auto loan, as evidenced by the increase in the total number of new and used auto loans outstanding at credit unions. The number of auto loan on credit union books has risen 3.5% in the last 12 months.
Credit unions are maintaining strong dealer relationships, with indirect loan balances up 10 basis points from the first quarter of 2007.