RANCHO CUCAMONGA, Calif. - Credit unions’ share of auto loans dropped slightly during 2007, according to the 2008 Auto Lending Business Intelligence Report released by Credit Union Direct Lending.
The annual report found that credit unions maintained a significant market presence in 2007, with16.9% of all auto loans originated being underwritten through credit unions, down slightly from 18% in 2006. Likewise, banks’ market share dropped from 34.2% to 32.6% in 2007, the report found.
CUDL, which said it developed the Auto Lending Business Intelligence Report as a resource for credit union organizations to better understand credit unions’ role in the auto lending market and to help benchmark their performance, represents a network of more than 600 credit unions and 9,000 automotive dealers nationwide.
The report suggests that a key to credit union market success in 2007 was the ability to offer competitive financing to members when compared to other lending institutions. “Credit unions continued to offer low rates and flexible loan terms to grow loan volume, whereas other financial institutions turned to non-prime and sub-prime lending to boost their loan volumes, the report states. For instance, sub-prime loans made up nearly half of all the loans that finance companies originated in 2007.”
“Auto lending continues to be the one area where credit unions held a significant market share,” said CUDL’s market research analyst, Joe James, including five states where an individual credit union is the top-ranked lender.
The report added, “Although credit union indirect delinquencies and charge-offs increased from 2006, these rates were still in line with the delinquency and charge-off rates on other consumer loans that credit unions offer. The credit union delinquency rate on indirect loans was 1.2% in 2007 while the credit union delinquency rate on other consumer loans was 1.3%.”
