WASHINGTON -Auto loans historically have been many members' first lending relationship with their credit unions, and that trend doesn't show any signs of changing. Despite dealing with continuing competition from manufacturers' rebate and incentive offers and an overall more intense auto loan market, credit unions continue to hold their own in funding members' auto loans. According to Callahan and Associates, credit unions' auto loan penetration rate among members as of September 2004 was 15.7%. While that's only up slightly from their 14.6% penetration rate in 1995, EVP Jay Johnson noted the more recent number is almost equal to credit unions' overall share of the auto loan market. When evaluating the numbers, Johnson said it's important to remember that most car loans are on credit unions' books for only about two years. That means, he says, that once the loan pays off the member doesn't show up on a credit union's auto loan penetration rate even though the member still owns the vehicle. "Auto loans have historically been credit unions' bread and butter," says Johnson. "Credit unions know this business very well and have been able to offer very competitive rates even in the face of manufacturers' rebates and incentives. They're holding their own." -

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