May 13 2013

Predicting Members’ Choice of Auto Lender: Borrowing from Credit Unions or Elsewhere?

In 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 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.

We performed an extensive survey (100+ questions) of thousands of members of seven credit unions to explore what factors might predict members’ choice of auto lender. The data show that credit unions’ relationship strengths play a surprisingly large role in auto loan selection, while their historical pricing strength (at least in aggregate) seems to be less important. This report details the most important predictors of members' choice of auto lenders, based on past behavior, and the infographic below gives a quick snapshot of key conclusions.

Thank you to Enterprise Car Sales for their generous support of this research.

Report Number 295