Credit unions are competing aggressively in the automotive marketplace, financing one in four auto loans so far in 2015, CU Direct reports.
Auto finance volumes were up in every risk tier in the fourth quarter 2014, suggesting that concerns over the uptick in subprime loans are exaggerated.
The total outstanding balance on open automotive loans hit $886 billion in the fourth quarter of 2014, but subprime and deep subprime market share remained at low levels.
The total balance of auto loans in December 2014 was $975 billion, representing 33.2% of total outstanding non-mortgage consumer debt, according to Equifax.
A rise in delinquencies wasn’t cause for concern during the third quarter 2014, and all signs point to auto finance sources staying active in the quarters ahead.
Installment loan delinquencies fell to a record low in the third quarter, with auto loans originated through auto dealers falling from 1.55% in the year-ago period to 1.51%
TransUnion’s annual auto loan forecast calls for auto loan debt to rise to $18,244 by the end of 2015. This would mark 19 consecutive quarters of increases since the first quarter of 2011.
In the third quarter of 2014, 30- and 60-day automotive-loan delinquencies grew 3.7% and 8.6%, respectively, from the previous year. The change was due to growth in subprime loans.
The total dollar amount of automotive loan balances outstanding hit $839.1 billion in the second quarter of 2014, up 11.7% from the previous year. Officials said the industry should watch this trend closely, as it may dictate the availability of credit in the future.
CUDL Credit Unions became the fourth largest lending segment in the first quarter, growing their origination count by 25.4%.
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