The number of credit union indirect lending programs has taken off over the past few years with 1,327 credit unions now granting indirect loans at year-end 2003, a 21% increase from 2002. Indirect loan originations have grown at an even faster rate, hitting $26.9 billion in 2003, up from $19.6 billion in 2002, a 37% growth rate.
If you've been thinking about starting an indirect auto lending program at your credit union, here is a fact you should know:
In 2003, credit unions with indirect lending programs grew their new auto loan portfolios by 11.7%, demonstrating the value and return on investment of establishing a program and building relationships with local auto dealers.
The 8,243 credit unions without an indirect program showed a dramatically different story. These credit unions, which make up over 86% of credit unions by number, showed negative new auto loan growth for 2003, losing 1.5% of their balances.