“As time goes on, I think that will work itself out,” he predicted. “But in general, as we look at 2011, even if consumers can afford something, they are still going to be a bit more conservative and cautious than they would have been prior to the recession. You have a situation where unemployment is likely to remain above 9% during the coming year, and that will contribute to keeping some buyers out of dealer showrooms.”

Schuster sees the consumer caution not only in how frequently they come back into the market for a car but also in the type of vehicle they need. They may decide a mid-size vehicle rather than a large one will meet their requirements. Even a buyer in the premium car market may opt for an entry-level or lower-end premium instead of going for the top of the line. That, of course, could shrink the loan balances borrowers take on.

Again, he expects this will work its way out of the system. As time continues, people will tend to forget the bad times, look at the good times ahead and resume normal buying patterns. They may even indulge themselves.

Will lenders such as credit unions in various areas of the country see different patterns?

“I think there is some regionalization to the recovery,” Schuster responded. “Certainly Michigan, for example, was hit harder than many states, and I think will take a little bit longer to bounce back. There will be areas that will lead the auto recovery and others that will lag.”

He also expects some demographic patterns to emerge. Younger buyers, he noted, exited the market first. They essentially stopped buying cars. They are now coming back into the market in larger numbers. It's partly a function of the availability of credit, which isn't back to prerecession levels but is improving.

He agreed that while a credit union doesn't want to ignore its older auto loan applicants, you do want to make certain younger buyers receive your message. They're on the sidelines watching the economic recovery, and they may require a little more persuading.

Schuster expects there will be a lot of eyes on the domestic automakers in 2011. It's the first full year General Motors and Chrysler have emerged from their bail-outs with a new product lineup. Ford, which never received the federal money, is doing well. By the end of the year, Schuster expects to be able to see how the domestic makes perform and whether that is sustainable.

He believes the recession, the highly publicized Toyota recalls and that GM and Chrysler have emerged from bankruptcy are prompting buyers who have left the domestic brands to take another look.

“They [the domestic automakers] have increased quality, and they have been working at bringing out vehicles and designs that are very competitive,” Schuster said. “The market in 2011 is probably more open in that sense than it has been in a long time.”

Overall, cautious optimism is the phrase Schuster would apply to auto lending in 2011. “Things feel better, but there's still a lot of uncertainty out there,” he stated.