Vehicle sales reached their lowest point in 15 years in September. Overall new auto sales for the month amounted to 965,671 vehicles, a 25.7 percent drop when compared with the 1.3 million vehicles sold in September 2007. New auto sales for 2008 are projected to reach 13.6 million units, down from 16.2 million units in 2007, while used auto sales are expected to reach 38 million units in 2008, down from 41.4 million units in 2007.
Although vehicle sales have continued to slide in 2008, credit union auto lending market presence has continued to increase through the year. Credit union market share reached 20.8 percent in September, a 3 percent increase over September 2007. This was partly due to a number of large banks and finance companies pulling out of auto lending or drastically cutting back their lending activity.
Banks’ market share decreased by 2.9 percent in September, due in large part to national lender HSBC’s pull out from auto lending completely. Capital One and AmeriCredit cut back on their auto lending, due to rising delinquencies, and as a result, finance companies’ market share decreased from 25.0 percent to 23.4 percent.
Another reason for credit unions’ continued increase in market share is the number of financing incentives they have offered on hybrid vehicles and other fuel-efficient vehicles. As in the previous quarter, credit union member’s interest in smaller, more fuel-efficient vehicles remains strong. Testament to this, the Toyota Prius and the Honda Fit generated the most leads to dealers on CUDL AutoSMART through September 2008. They were followed by the Honda Civic and Toyota Camry. Credit union members who research vehicles online continue to look towards more fuel efficient vehicles, even as gas price points have lessened.
The shift towards more fuel-efficient vehicles has been visible on other auto buying sites as well. AutoUSA reported that the Toyota Prius has generated 273.0 percent more leads in 2008 than it did in 2007. Some Toyota dealerships are averaging three to five Prius orders a day from online consumers and people who walk into their dealerships.
The auto loan maturities on loans funded on the CUDL platform have remained relatively the same in 2008 as compared to 2007. The average loan maturity on a new car loan decreased from 72 months in 2007 to 71 months in 2008, while the average loan maturity on a used car loan remained at 65 months. For CUDL credit unions, 60 month loans and 72 month loans remain the most commonly financed loan maturities in 2008.
There was an increase in the number of 72 month term loans that CUDL credit unions financed in 2008 versus 2007, while the number of auto loans booked for 84 months have decreased in 2008. Over half of all auto loans financed on the CUDL platform were financed for over 5 years, as credit union members looked for longer loan terms. With longer loan terms, credit union members have been able to secure the lower monthly payments that leases traditionally offered.
To learn more about credit union auto financing trends and how credit unions compare to other financial institutions, check out the 2008 CUDL Business Intelligence Report at www.cudl.com.