Auto Lending Booms; Indirect Grows As A Channel Of Choice

Indirect lending fuels double-digit growth in the auto portfolio.

 
 

Exciting trends are emerging for credit union performance in the third quarter.

Automotive lending continues to be a bright spot with preliminary FirstLook estimates — based on nearly 6,000 credit unions representing more than 97% of industry assets — projecting a year-over-year expansion of 15.0%, or $33.7 billion, for the credit union automotive portfolio. For FirstLook credit unions, used auto loans have increased $18.8 billion and new auto balances have increased $14.8 billion.

NEW VS. USED AUTO LOANS
For FirstLook credit unions | Data as of 09.30.15
© Callahan & Associates | www.creditunions.com

New_vs_Used_Auto_Loans

Source: Peer-to-Peer Analytics by Callahan & Associates

Indirect lending surpassed direct auto lending for the first time in the second quarter of 2015 and continued to outpace direct lending through the third quarter.

Although not all indirect loans reported by credit unions are related to autos, 95% of credit unions reporting indirect loan originations use this channel solely for auto lending. From third quarter 2014 to third quarter 2015, indirect lending increased 21.8% compared to 8.6% for direct auto lending.

Indirect lending has become more popular at credit unions over the past five years and as such has steadily accounted for a greater proportion of the loan portfolio. In the third quarter of 2010, indirect lending accounted for 12.8% of the credit union loan portfolio. That has now increased to 17.0%, according to third quarter 2015 data.

INDIRECT VS. DIRECT AUTO LOANS
For FirstLook credit unions | Data as of 09.30.15
© Callahan & Associates | www.creditunions.com

Direct_vs_Indirect_Auto_Loans

Source: Peer-to-Peer Analytics by Callahan & Associates

 

 

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Nov. 13, 2015


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