The sharp drop for credit unions was accompanied by a nearly equal and opposite rise for banks: Their share of total financing was 27.2% in the fourth quarter, up from 23.8% a year earlier and 25.8% in the third quarter.

Melinda Zabritski, Experian's head of Automotive Financial Insights and author of the report, told CU Times some of the change might reflect a pullback by credit unions that had allowed auto loans to become too large a part of their portfolios a few years ago. On the other hand, bankers are getting hungrier.

“I increasingly hear from a lot of banks that they’re looking to grow again,” Zabritski said. “We certainly see that reflected in the market share.”

And in the new car market, credit unions and others “can’t really beat the captive rates.”

Credit unions’ share of new car loans and leases was 9.4% in the fourth quarter, down from 12% a year earlier and 10.1% in the third quarter.

Meanwhile, banks’ share of new car financing grew to 24.8% in the fourth quarter, up from 20.2% a year earlier and 22.7% in the third quarter.

Captives still dominated new car financing, but their share ebbed. They held a 57.8% share in the fourth quarter, down from 60.3% a year earlier and 58.7% in the third quarter.

While credit unions set a record low for new car share, perhaps the greater pain was in used car loans, which accounted for two-thirds of the balance of total auto loans at credit unions on Dec. 31.

Credit unions were the largest lender type for used car loans in seven of the past nine quarters starting with the third quarter of 2022, including the second and third quarters of 2024. But banks regained the lead in the fourth quarter.

Banks’ share of total used auto loans was 28.7% in the fourth quarter, up from 26.1% a year earlier and 28.1% in the third quarter.

Credit unions’ share of total used auto loans was 27.5% in the fourth quarter, down from 29.4% a year earlier and 28.8% in the third quarter.

The percentage of used cars with financing has been falling. It was 36.5% in 2024, down from 41.6% in 2022 and 38.7% in 2023.

The amount financed for used cars was $26,458 in the fourth quarter, down from $27,908 in 2022 and $26,812 in 2023.

The amount financed for used cars was $26,458 in the fourth quarter, down 1.3% from a year earlier and up 0.5% from the third quarter. The decline in financing for used cars extends over all risk classes.

Zabritski also discussed with CU Times some of the uncertainties around tariffs by President Donald Trump on Wednesday. The day had started with 25% tariffs on all goods imported from Canada and Mexico and 10% on all goods from China. By the end of the day, he had given automakers a month-long reprieve.

Zabritski said tariffs by President Trump would increase new vehicle prices, which would likely cause loan balances to rise.

“The manufacturers can still pull the trigger of incentives to attempt to bring some of those down,” Zabritski said. “The question is: Will they?”

Higher new vehicle prices could steer more buyers into used car lots. “We saw that a couple years ago,” Zabritski said. “The impact was dramatically increasing the price of used cars.”

The price pressure on used cars is also being influenced by the low lease rates of 2021 and 2022, which meant fewer post-lease cars rolled into the used car market.

Contact Jim DuPlessis at [email protected].