May 13 2013
Predicting Members’ Choice of Auto Lender: Borrowing from Credit Unions or Elsewhere?
In 2013, by unit volume, auto loans are still the largest piece of US credit unions’ lending portfolio. This research was designed to help credit unions maintain and grow this essential loan segment. The report seeks to understand the large fraction of credit union members surveyed (24%) who choose lenders other than credit unions for their auto loans.
In 2005, long before the real estate crash and when the Great Recession was only an inkling, Americans bought 17.4 million new vehicles, the peak of an almost decade-long trend of annual sales hovering around 17 million. That’s like selling a new car every year to every person in Ohio and Indiana combined. By 2009, new car sales had plunged to 10.6 million units (a 39% decline), completing a double whammy on credit union loan portfolios already rocked by real estate losses.
At the beginning of 2013, auto sales are creeping back toward pre- recession levels (2012 ended with 14.8 million units sold), which is helping credit unions bolster lending. The expanding market also opens up opportunities for growing market share. By unit volume, auto loans are still the largest piece of US credit unions’ lending port-folio. This research was designed to help credit unions maintain and grow this essential loan segment.