The Buzz Around Auto Lending In The Beehive State

How America First, Mountain America, and Security Service divide and conquer the Utah auto market.

 
 

The credit union auto loan market share by state varies widely across the country. For fourth quarter 2016, Utah captured an industry high of 54.8%, whereas New Jersey came in with an industry low of 2.9%. The weighted national average as of year-end 2016 was 18%.

So, what’s happening in the Beehive State?

Utah is home to America First Credit Union ($8.2B, Ogden, UT) and Mountain America Credit Union ($6.1B, West Jordan, UT), which hold among the highest dollar value of outstanding auto loans for credit unions nationally — America First came in at No. 4 and MACU at No. 12 as of Dec. 30, 2016. Texas-based Security Service Federal Credit Union ($9.4B, San Antonio, TX), which boasts the second-largest credit union auto portfolio in the United States, also conducts a lot of auto lending in Utah. All three credit unions have multiple branches in both the southwest Utah and the Salt Lake City metro area.

In 2016, consumers financed 227,869 vehicle purchases and leases in Utah, of which credit unions underwrote 124,924. Of those credit union loans, America First financed 43%, Mountain America 11%, and Security Service approximately 7.2%.

 

All three credit unions are heavy players in the indirect lending market. At Mountain America, for example, indirect lending comprises 65.0% of the auto portfolio. That number is 73.6% at America first and 92.5% at Security Service. For comparison, the national average is 55.1%. Note, the 5300 Call Report does not break out indirect auto lending from the larger indirect lending field; however, most indirect lending at credit unions tends to come from the auto category.

Although all three credit unions are major providers of auto loans in Utah, each credit union captures different borrowers. As of Dec. 31, 2016, Security Service held 42.8% of its auto portfolio in new auto loans, compared with 28.3% for credit unions nationally. Mountain America and America First held 72.6% and 87.7%, respectively, of their auto portfolios in used auto loans, compared with 62.7% for credit unions nationally.

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While examining the auto lending of these credit unions, it is also important to consider asset quality. Mountain America posted a total auto loan delinquency rate of 0.39% as of Dec. 31, 2016. That is 33 basis points lower than the national average of 0.72%. America First and Security Service had above average total auto loan delinquencies, at 0.87% and 1.98%, respectively  

America First, Mountain America, and Security Service have all built successful auto loan portfolios while serving the Beehive State, and none show signs this performance will slow in the near future. 

 
 

March 3, 2017


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