Is Credit Union Auto Loan Penetration At An All-Time High?

Take this industry performance pop quiz from Callahan & Associates to learn about trends in credit union auto lending.

As of March 31, 2018, credit unions held $343.9 billion in auto loans. That’s up 10.9% from the first quarter of 2017.

At 35.0% of total lending, auto lending trailed only first mortgage lending for dominance in the portfolio. More than 2,400 credit unions nationwide hold 50% or more of their loans in auto.

Answer the questions below to test your credit union auto lending knowledge.


Click on the question to view the answer.

Question 1: (True or False) With 12.2% year-over-year growth, the dollar amount of new auto loans outstanding surpassed the dollar amount of used auto loans outstanding.

False. New auto loan growth has outpaced used growth since the third quarter of 2012. However, used auto lending is still the larger segment and accounted for 60.5% of the auto portfolio for industry in the first quarter of 2018. New and use auto loans outstanding reached $135.9 billion and $208.0 billion, respectively, as of March 31.

Question 2: (True or False) Over the past 20 years, the average credit union auto loan amount has doubled.

False. The average credit union auto loan was $14,647 in the first quarter of 2018. That’s up 61.8% from $9,051 in the first quarter of 1998.

This might seem like a dramatic increase, but inflation plays a role. According to the inflation calculator from the Bureau of Labor Statistics, $9,051 in March of 1998 had the same buying power of roughly $14,000 today. Nevertheless, today’s average auto loan is still a bit higher. This could be because of the increased prevalence of new auto loans and the increasing price of cars. The average used auto loan at a credit union in the first quarter of 2018 was $12,396; that average increases to $20,267 for a new auto loan, which is in line with the Kelley Blue Book.

Question 3: (True or False) Credit union auto loan penetration is at an all-time high.

True. According to data from Callahan & Associates, 20.6% of members financed an automobile through their credit union in the first quarter 2018. Auto loan penetration has steadily increased from 15.8% in the first quarter of 2012 and is at an all-time high.

Membership is growing at credit unions across the country, and members are helping credit unions continue their strong auto lending trends. For example, despite climbing auto loan growth, the delinquency and net charge-off ratios declined slightly year-over-year.

Despite strong auto loan growth, credit union auto delinquency and net charge-offs are both down slightly year-over-year.

As auto lending ramps up over the summer, consider how industry trends are affecting your credit union and market.


Looking For Answers About Your Auto Portfolio?

It takes minutes to compare various aspects of your auto lending portfolio to other credit unions with Peer-to-Peer. Let us walk you through your numbers with a customer performance audit. Sign up now.

June 4, 2018

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