Rancho Cucamonga, Calif. — Credit unions maintained a significant share of the auto lending marketplace in 2006, while credit union members have the lowest average monthly payments on new vehicles, according to CUDL’s 2007 Auto Lending Business Intelligence Report.
CUDL (CU Direct Corporation), which administers indirect and point-of-sale lending networks for credit unions and includes over 580 credit unions and 8,400 automotive dealers nationwide, released their first annual Business Intelligence Report, highlighting key credit union auto lending trends and statistics over the last year. The report reveals a number of key findings.
According to the report, credit unions held 18 percent of all auto loans originated in 2006, down from a record high of 19.3 percent in 2005. Although down slightly from 2005, market share in 2006 was high compared to previous years, as auto lending remained the one product area where credit unions held a significant market share.
The report also shows that credit union members had lower average monthly payments and financed smaller amounts on new vehicles in 2006, when compared to consumers that finance through a captive or bank. Credit union members had an average monthly new vehicle payment of $389 and on average financed $17,645. Consumers relying on financing through captives, on the other hand, averaged $422 a month for their new vehicle, and on average financed $20,442.
Further, CUDL’s report reveals that credit union members are also seeking longer maturities for their new vehicle loans, as over two-thirds of all new auto loans originated by credit unions in 2006 had a maturity greater than five years. This trend mirrors that of all financial institutions, as 55 percent of new auto loans originated by banks and captives in 2006 also had maturities greater than five years.
CUDL’s report also finds that indirect loans made up 39.4 percent of all credit
union auto loans outstanding in 2006. More impressive is the fact that the report reveals 80.0 percent of all net auto loan growth between December 2005 and December 2006 came through indirect lending channels.
“Although there was a slight decline in market share in 2006, credit unions continue to show a strong performance in the auto lending arena, as they have solidified themselves as strong competition for the established captives, banks and independents,” said Tony Boutelle, president and CEO of CUDL. “A key to credit union success has been their ability to develop significant partnerships with auto dealers. As a result, credit unions have been able to grow their auto loan portfolios through indirect lending channels.”
CUDL’s Auto Lending Business Intelligence Report serves as a resource for credit union
organizations to better understand credit unions’ role in the auto lending market, benchmark their performance and learn best practices.
Credit unions interested in obtaining a copy of the 2007 Auto Lending Intelligence Report can do so by visiting www.cudl.com.