What’s So Special About Special Financing?

Now reaching over $500 billion a year, the auto financing market is one of the fastest growing sectors in consumer finance.

 
 


Now reaching over $500 billion a year, the auto financing market is one of the fastest growing sectors in consumer finance.

Over the past decade, the “special finance” or sub-prime auto lending market has grown significantly, now accounting for 30-35% of the overall market with many indicators pointing to even more growth (CNW Research). With new and used auto sales near record levels and with 1/3 of U.S consumers in this “special finance” sub-sector, many credit unions see an opportunity to originate more loans and to help a member who would have likely chosen another loan offer.

Many credit unions have started working with outside vendors to help their special finance members, while other credit unions have developed programs in-house.

The special finance market is by no means restricted to auto lending. Sub-prime mortgages made up about $210 billion, or 10% of all mortgages in 2002 (Freddie Mac). With the average credit union first mortgage balance at about 10 times the size of the average vehicle loan balance, losing a member’s first mortgage loan due to credit restrictions could be very damaging to that member’s future relationship with the credit union.

Listen to the discussion on this unique market opportunity and how leading credit unions are managing their sub-prime programs to boost returns and provide increased member value through more originations to lower credit members.

 

 

 

Feb. 23, 2004


Comments

 
 
 
  • Plan to listen on 2-26.
    Anonymous
     
     
     
  • I had asked for info on sub prime performance through this web site several weeks ago but had no response.
    Anonymous