As mid-year approaches, the pressure is on to maintain the pace
of new vehicle sales. New car and light truck sales are projected
to reach 16.5 million this year, despite a 2.4% drop in April. Thus,
the Big 3 auto manufacturers (GM, Ford and Chrysler) are continuing
to offer aggressive incentives to lure customers into their showrooms.
Many credit unions have turned to indirect lending as an effective
way to compete for auto loans in today's intensely competitive environment.
Indirect lending does seem to be making a positive impact, especially
on new auto loan growth, as seen on the chart below. Among indirect
lending participants responding to a 2002 Callahan & Associates
survey, new auto loans grew +4% year-over-year, compared to -7%