U.S. auto sales were down in the 1st quarter of 2008, as new vehicle sales hit their lowest point in nine years in 2007. There were 9.8 million new and used vehicles sold in the U.S. in the 1st quarter of 2008, continuing a downward trend from the 10.7 million vehicles sold in the first quarter of 2007 and the 11.0 million vehicles that were sold in Q1 of 2006. The 1st quarter is always a slow period for auto sales, but automakers have struggled particularly this year, thanks to rising gas prices and the continuing downturn of the U.S. housing market.
Source: CNW Market Research
On the lending side, half of the nation’s top 10 lenders experienced auto loan declines in the 1st quarter of 2008. The lender that experienced the largest decline was AmeriCredit, whose loan volumes declined 43.4% between the 1st quarter of 2007 and the 1st quarter of 2008. After increasing their loan volume in 2007, thanks in part to a large number of sub-prime and non-prime originations, AmeriCredit pulled back from the market after experiencing a large number of delinquencies and charge-offs in the second half of 2007.
Credit unions continue to steer clear of the sub-prime marketplace, as in 2007, instead focusing on lending primarily to members with prime and non-prime credit. Although credit unions did experience a decline in auto loan originations in 2007, CUDL credit unions as a whole represented the nation’s seventh largest auto lender. Credit unions are now well-positioned to gain market share, as many captives, banks, and finance companies are expected to retreat further from the market in 2008.
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.