Measured by loan value, credit unions held 27% of the $1.1 trillion U.S. total for the third quarter, while banks held $405 billion, a 37% share, according to the FDIC and CUNA Mutual Group.

Indirect lending has been growing at a 20% annual rate since 2014, while direct lending has been growing about 7% to 8%, Sam Taft, director of industry analysis for Callahan & Associates in Washington, said.

Johnston said indirect lending has been an enormous benefit to credit unions because many do not have the budgets for advertising and marketing needed to build their auto loan business independently.

"They don't have to market to their entire area," Johnston said. "By going indirect they reach people right at the dealer who would never consider a credit union. This has allowed them to be competitive with anybody out there."

But while indirect transactions technically create members, their affiliation might be little more than making monthly payments. Only about 16% to 18% of indirect borrowers open a checking account or take out another loan from their credit union. "The challenge of indirect lending is converting those people into more meaningful members," Taft said.

First Community Credit Union of St. Louis has seen steady growth since the recession, but this year's growth has been exceptionally strong, driven by indirect lending.

Auto loans stood at $666 million on Sept. 30, up 22% from a year ago and 74% since 2006. Loan production volume has been even stronger, rising 35% to reach $377 million for January through November.

"Indirect lending has played a huge role," said Laura Alfeldt, vice president of marketing.

First Community ($2.23 billion in assets, 269,424 members) expects to generate more than $230 million in originations from indirect loans this year, up 66% from 2015.

Indirect loans serve members because they meet their demand for simplicity.

"Most people still buy cars at dealerships, even if they do their own research online," Alfeldt said. "Most want to see the car and drive it before they buy it. They want the loan paperwork done for them and they want it to happen quickly. The dealers and lenders that can make that happen get the deals."

And if that doesn't work, First Community usually has a loan refinance campaign at year's end called 100 Reasons.

"We give a $100 cash bonus for a loan refi from another lender," Alfeldt said. "If we don't get their auto loan when they buy the car, we try and get it back."

First Tech Federal Credit Union, based in Mountain View, Calif., has seen strong growth in auto loans this year as it has originated loans in new territories through indirect loans.

Auto loans at First Tech ($9.29 billion in assets, 457,100 members) stood at $1.54 billion on Sept. 30, up 24% from a year ago.

Aaron Rehfield, First Tech's vice president of indirect lending, said he is expecting U.S. lenders as a whole will originate auto loans in 2017 at a rate similar to this year, but he expects First Tech to set another record by improving technology, processing times and relationships with members and dealers.

The credit union launched an onboarding program this year to encourage members who joined by way of an indirect loan to consider opening a checking account or taking out a mortgage or other type of loan.

"A focus this year will be to deepen relationships with members," he said. "We definitely want to see more than just an auto loan with us."

Most of the growth will come from the credit union's indirect loan network of 1,500 to 2,000 dealerships, including large chains like AutoNation, Rehfield said.

First Tech has a natural advantage in its dealer relationships. Because its underwriters work on Pacific Time, they are able to close deals as late as 10 p.m. for East Coast dealers.

"Dealers want people working the same hour," he said.

United Federal Credit Union, based in St. Joseph, Mich., carried $602 million in auto loans on Sept. 30, up 14% from a year earlier. Indirect loans accounted for about $409 million of the loans.

United FCU ($2.2 billion in assets, 152,463 members) has 30 branches in Arkansas, Indiana, Michigan, North Carolina, Ohio and Nevada.

Shawn Lenfestey, indirect sales manager, said one way United FCU is trying to gain market share is "buying deeper" — expanding its lending criteria to riskier borrowers.

United FCU has a first-time buyer program that allows a potential member who has not had any credit in the past, but still meets other criteria, to obtain an auto loan. "The hope," Lenfestey said, is "the credit union will have the opportunity to earn the loyalty of the member for a long time to come."

The credit union manages risk by maintaining "a great collections department" and practicing "constant monitoring of how the delinquencies are doing." Loans that are 60 days or more delinquent remain well below the industry standard of 2%, he said.

The Seattle-based BECU's auto loans grew 12% to reach $1.96 billion in the third quarter.

Aaron Bresko, BECU's vice president for indirect lending and consumer lending, said he is expecting another strong year of car sales nationally. But even if sales are little or no better than this year, "we're hoping to pick up a bigger piece of the pie."

Part of that growth will come from geographic expansions. BECU ($15.66 billion in assets, 988,691 members) has opened branches in eastern Washington and in North Charleston, S.C., where Boeing has an aircraft plant. The credit union is also expanding its indirect lending program into 10 counties in Oregon. It is already the largest auto lender in Washington.

Most of BECU's growth will be channeled through its indirect loan program and even those members who start the process in a credit union branch. About 58% of BECU's indirect loans started out as direct loans, but are classified as indirect loans because they are completed at the dealership, saving the borrower the hassle of returning to the branch.

"To be a strong player for our members, we have to have a solid indirect program and good relationships with the dealer partners," Bresko said. "They help us sell a loan, and we help them sell a car. If we did not have that relationship, we would lose a lot of our member loans."