Indirect Lending Propels Auto Loan and Membership Growth

Indirect lending programs enable members or nonmembers to apply for financing with a credit union at their auto dealership. Credit unions with these programs have experienced greater auto loan and membership growth.


Credit unions with indirect lending programs experience much higher auto loan growth than those without. These programs enable members or nonmembers to apply for financing with a credit union at the dealership.

Since credit unions have the ability to sign up new members at the dealership member growth is also stronger with indirect lending programs (see table).

Midyear data reveals more than half of all credit unions over $50 million in assets have indirect loans on the books. However, this type of program can work for credit unions of any size.

There is a significant investment required to establish and run a successful indirect lending program. While larger credit unions are generally the strongest performers, more than 130 of the 1,450 indirect credit union lenders are under $20 million in assets.

At midyear indirect lending topped $45 billion for the credit unions, constituting over 11 percent of the entire industry’s loan portfolio.

For Credit Unions over $50M
1,004 CUs with Indirect Program
986 CUs without Indirect Program
All 1,990 CUs over $50 million in Assets
Total Auto Loan Growth
New Auto Loan Growth
Used Auto Loan Growth
Member Growth

Research in Local Markets Yields Success
An essential component of a successful indirect lending program is tracking credit union performance and local market share. Armed with this knowledge, credit unions can make strategic decisions to target specific dealers potential for business expansion.




Sept. 20, 2004


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