Credit Unions’ Auto Loan Portfolios Rebound

Outstanding auto loans at credit unions grew for the first time in the fourth quarter of 2011 since the third quarter of 2009.

Credit unions held $166.7 billion in auto loans on their books at the end of 2011, up 0.3% from the $166.2 billion at the end of 2010, according to Callahan & Associates’ Peer-to-Peer data.Used vehicle loans grew 5.1% annually while new vehicle loans declined 7.4%.

The dollar increase of used vehicle loans counterbalanced the decline in new vehicle loans. Notably, the 7.4% decline in new auto loans is about half the decline posted at the end of 2010. Whilenew auto lending is still falling, the rate of decline has improved significantly. This is the first quarter that credit unions have had positive annual growth in auto lending since the third quarter of 2009.

Annual Credit Union Auto Lending Market Share
For All U.S. Credit Unions | Data as of December 31, 2011
Source: AutoCount data from Experian Automotive; Callahan & Associates’ Peer-to-Peer software.

Credit unions’ market share of auto loans fell slightly from last year, as the improving economy brought traditional lenders back into the fold. Credit unions made 14.6%of all auto loans in 2011, down from 15.1% in 2010. Credit unions made 10.0% of new auto loans and 20.1% of used auto loans in 2011. Auto loan penetration with members at credit unions alsofell during the same time, down to 16.0% from 16.5% in 2010. This is likely due to the 0% financing and other incentives that captive financers and commercial banks have been offering, which make is more difficult for credit unions’ to capturemembers attention.

Percentage of Credit Unions with Annual Auto Loan Growth
For All U.S. Credit Unions | Data as of December 31, 2011
Source: Callahan & Associates’ Peer-to-Peer software.

According to Automotive News, U.S. light-vehicle sales rose 10% in 2011 from 2010 to 12.8 million vehicles. 2012 data indicates this momentum hascontinued into the new year, with 11% growth of light-vehicle sales in January 2012 from the prior year. If strength in new vehicles sales continues in 2012, credit unions willhave more opportunities to help members finance vehicles.

May 23, 2014

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