For the first time in 13 years, credit unions have grown their auto loan portfolios past the high of 12.9% annual growth that occurred in March 2001.
Several factors contributed to this recovery, according to Dave Colby, chief economist with CUNA Mutual Group.
“Stronger employment and income growth, the recovery in new light vehicle sales, fewer financing subsidies from vehicle manufacturers and growing replacement demand due to an aging vehicle fleet, just to name a few,” said Colby in CUNA Mutual's May Credit Union Trends Report, which tracked data through March.
The national average new vehicle loan rate was 3.04% in March, down nine basis points year-to-date, 29 basis points during the past year and 336 basis points or 52% since the beginning of the recession, the data showed.
March's used vehicle loan rate was 3.72% and it has declined in a pattern very similar to new vehicle loan rates, Colby said.
Driven by auto loans, total loans for the credit union industry topped the $669 billion mark in March. The 12.9% annual growth accounted for nearly 45% of all credit union loan growth since March 2013 and 69% on a YTD basis.
“Credit unions positioned themselves well for the recovery by maintaining consistent underwriting standards, expanded point-of-purchase financing options, and continuously lowered rates on new and used vehicle loans,” Colby said.
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