Credit union auto loan balances declined from $179.7 billion at year-end 2006 to $179.4 billion through the second quarter of 2007. The decline in credit union auto balances does mirror the auto industry's decline in total vehicle sales over this time period. In addition, when you compare credit union auto loan balances between June 2006 and June 2007, credit unions actually increased their auto loan balances by 2.0%.
While credit unions' auto loan growth between June 2006 and June 2007 was small, almost all of it came through the indirect lending channel. Indirect lending contributed $3.3 billion of the $3.5 billion in auto loans that credit unions added to their books during this time.
A Sneak Peek at 3rd Quarter Auto Lending Trends
CUDL credit unions have originated over 436,000 loans thus far in 2007 (through September 30, 2007). The average interest rates charged on new and used vehicles through the 3rd quarter of 2007 were 7.3% and 8.3% respectively. Interest rates remained relatively the same between the 2nd quarter 2007 and 3rd quarter 2007.
The average loan terms for loans originated by CUDL credit unions in the 3rd quarter of 2007 were 72 months for new vehicle loans and 66 months for used vehicle loans. As in previous quarters, over half of all vehicles purchased by CUDL credit union members were financed for longer than five years. Most financial institutions have an average loan maturity on their auto loans of greater than five years because consumers have been focused on lowering their monthly payments.
A Credit Union-owned Service Organization, CUDL develops custom applications, training and marketing programs to help credit unions achieve their auto lending goals. The CUDL Network connects over 9,000 automobile dealerships with more than 600 credit unions and their 18 million credit union members nationwide.