One in four vehicles sold are being financed by credit unions, which represents a 20% year over year increase, CU Direct Market Research Analyst Jose Torres said in a Tuesday webcast.
New car sales are expected to reach 17.7 million in 2016, Torres said, noting that represented a 3.3% increase compared to last year.
In addition, more than one in four credit union members have auto loans, he said.
The percentage of truck purchases has also continued to grow. For every vehicle sold, 1.4 trucks are now sold, Torres said. Leasing also remains a popular option. In 2011, 19% of total vehicle transactions were leases; that has grown to 30% so far this year. Leasing has become popular around the world, Torres said, adding that in the United Kingdom, 61% of vehicle transactions now consist of leasing arrangements.
Near prime and subprime borrowers are the fastest growing segments of the market, with more than 36% of the market now being non-prime, Torres said. Loan delinquencies did not increase during the fourth quarter of last year compared to the same time period in 2014, according to Torres.
He said auto loans now comprise one-third of credit unions' portfolios and are the fastest-growing part of their portfolios. At the same time, the indirect lending channel is the largest source of that growth, having almost doubled in the last five years.
CU Direct is an Ontario, Calif.-based CUSO that specializes in lending, automotive and strategic solutions for credit unions. It has worked with more than 1,000 credit unions and made more than $186 billion in loans since being founded in 1994.
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