Credit Union Auto Market Share Correlates with Member Penetration

Credit unions hold a significant share of the U.S. auto lending market (18.4 percent as of October). See how this has impacted member penetration.

 
 

In states where credit unions have a significant share of the auto lending market, they also have strong membership penetration among the state’s population. Credit unions hold 18.4 percent of all U.S. auto loans, according to AutoCount USA. At the same time, credit union members comprise 28.9 percent of the U.S. population.

The two states where credit unions hold the largest share of the auto lending market, Oregon and Hawaii, rank eleventh and fourth in member penetration respectively. The two states that hold the smallest share, Arkansas and Mississippi, rank fifty-first and forty-ninth respectively.

While this may seem self-explanatory, it highlights an increasingly popular strategy that credit unions are taking to sign new members up: indirect lending. Through partnerships with dealers, credit unions are able to originate auto loans with potential members who may not have known that they could join a credit union in the first place. In the five states where credit unions hold the largest market share, indirect loans make up 48.0 percent of their auto loan portfolio versus the industry average of 35.3 percent.

For example, Utah’s America First Federal Credit Union and Mountain America are the two leading auto lenders in the state and are also heavily involved in indirect lending. They both rank among the top 100 credit unions nationwide in indirect loans outstanding. While indirect lending is just one tactic, the bottom line is that credit unions that are generating auto loans are also gaining members.

The Top 5 States by Credit Union Auto Market Share

Data as of October 30, 2005

 

Auto Lending

 

Auto Loans/

 

CU Members/

 

Member

 

State

Market Share

Rk

Member (6/05)

Rk

Population

Rk

Growth (6/05)

Rk

Oregon

38.8%

1

25.8%

1

37.0%

11

2.6%

15

Hawaii

37.5%

2

13.9%

39

56.9%

4

3.5%

8

Washington

35.3%

3

19.5%

13

36.3%

12

2.1%

17

Utah

33.0%

4

21.8%

5

58.2%

3

3.2%

11

Colorado

28.7%

5

23.1%

2

31.6%

20

1.0%

32

The Bottom 5 States by Credit Union Auto Market Share

Data as of October 30, 2005

 

Auto Lending

 

Auto Loans/

 

CU Members/

 

Member

 

State

Market Share

Rk

Member (6/05)

Rk

Population

Rk

Growth (6/05)

Rk

Nebraska

9.7%

38

17.5%

22

23.8%

40

0.2%

42

Kentucky

8.5%

39

15.2%

34

18.2%

48

0.2%

41

Georgia

8.3%

40

14.7%

37

19.6%

46

-0.4%

46

Mississippi

6.6%

41

15.5%

33

17.2%

49

2.7%

14

Arkansas

6.3%

42

16.5%

27

10.2%

51

1.0%

34























Source: Callahan & Associates, AutoCount USA, U.S. Bureau of the Census.

AutoCount collects data from 42 states where it has relationships with the state’s Department of Motor Vehicles.
A full listing of credit union member penetration by state can be found in Callahan’s Credit Union Report.

 

 

 

Dec. 12, 2005


Comments

 
 
 
  • Although we get members with indirect loans are we creating the lifetime members? Most of these members never do additional business with us and I suspect most CUs. So what is the value of that membership?
    Anonymous
     
     
     
  • Great Information for the Credit Unions to consider. However this article could have mentioned the Credit Union Platform that creates these type of results. If other states were to follow this platform, "CUDL" the market penetration could be increased. I think you missed an opportunity to let others know how this occurs. Jerry Neemann CUDL
    Anonymous