MADISON, Wis.-Credit unions may not be able to count on the economy boosting auto sales and loan volume until 2012, when car loans may begin to return to levels closer to those experienced before the recession.
That's the projection from CUNA Mutual Group Chief Economist Dave Colby, who predicted that even in 2012, auto sales will still be lower than most levels seen during 2006 and 2007.
"Going forward we can expect slight improvements, as people have to replace some vehicles and due to the natural growth in the population," said Colby. "As the economy and employment pick up, so will vehicle sales. But it will not be robust growth. Over the next three years we will still be at least a million and a half to two million units, on average, below the long-term trend."
Overall, Colby described the economy as "fragile at best. There are a lot of unknowns. Will the stimulus work? When we pull that stimulus away, can we do it without causing inflation? It's uncharted waters and expect consumers to be cautious about spending."
Colby added that year over year, in 2009 credit unions were down 1% in overall vehicle loans. "Only the 4.1% gain in used vehicles helped dampen that decline. This is the third consecutive year of total (CU) vehicle loan portfolio decline."
