Auto loans comprise a majority of indirect loans outstanding at credit unions. Credit unions with indirect loans and credit unions with no indirect loans differed in many aspects with regard to their auto loan profiles. Credit unions with indirect loans had $741.2 million in assets on average – higher than credit unions without indirect loans at $309.7 million – as larger credit unions are more likely to participate in indirect loans than smaller credit unions. The former had a total of $148.2 billion auto loans outstanding versus $41.2 billion for the latter as of second quarter.
Both credit unions with and without indirect loans posted similar annual auto loan growth rates of 10.20% and 10.25%, respectively. However, the two peer groups showed stark differences in auto loan penetration and auto loan concentration. As of June 2013, credit unions having indirect loans reported 17.62% in auto loan penetration, 4.64 percentage points higher than credit unions having no indirect loans. The former group also posted much higher auto loan concentration of 33.01% as of June, which is 9.07 percentage points higher than the latter’s 23.94%. For both metrics, the differences were more apparent for used auto loans than new auto loans. Data shows that credit unions that offer indirect lending program tend to put more weight on auto loans within their loan portfolio and enjoy higher penetration as members are given more options to get auto loans.
AUTO LOAN PROFILE COMPARISONS
Data as of June 30, 2013 For CUs with Indirect Loans and CUs with No Indirect Loans
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Source: Callahan & Associates’ Peer-to-Peer Analytics
Callahan & Associates’ 2014 Directory