Credit unions will need to work harder to gain market share in the automotive loan market this year as the growth rate of car sales slows and more buyers choose to lease.
According to a report released Aug. 4 by CU Direct, a CUSO based in Ontario, Calif., dealers sold 8.6 million new cars from January through June, 1.4% more than 2015′s first half. In addition, used car sales rose 4.8% to 19.1 million, and new car sales are expected to reach 17.7 million this year, up from 17.5 million in 2015, the record high since 17.4 million cars were sold in 2000.
"Overall, credit unions continue to book loans at a healthy pace in 2016," Jose Torres, CU Direct's market research analyst, said.
Leases accounted for 32% of new vehicles so far this year, compared with 27% in 2015 and 14% in 2005. Car financing has fallen to 55% this year from 59% in 2015 and 62% in 2005. Cash sales, which account for the balance, have also shrunk.
Lenders originated 10.2 million loans in the first half, down 0.2%. The top three lenders were Wells Fargo Dealer Services with 572,710 loans, up 5%, Ally with 535,734 loans, down 7%, and CU Direct with 529,003 loans, up 16%. Credit unions' share of the value of originations has held at about 25% per quarter since 2014′s fourth quarter, up from 22% in the first quarter of 2014 – a gain made largely at the expense of banks.
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