McGraw-Hill Drives Auto Lending Higher

A New Jersey credit union uses two channels to boost new auto loans in fourth quarter 2014.

 
Andrew Bolton

 

Auto sales took off in 2014, with 16.5 million cars sold during the year. This is an increase of nearly 6% over 2013 and the highest total since 2006. Credit union lending programs are benefitting from this uptick in activity. As of Dec. 31, 2014, credit unions reported new auto loan growth of 21.3% and used auto loan growth of 13.5%. These numbers are up from 12.7% and 10.5%, respectively, in 2013.

Garden State-based McGraw-Hill Federal Credit Union ($348M, East Windsor, NJ) posted particularly strong new auto loan growth in 2014. Its new auto loan portfolio increased nearly fivefold during 2014, boosted by increases in both the direct and indirect channels. McGraw-Hill added $11.6 million in indirect auto loans in 2014, which accounted for slightly less than half of the growth in its new auto loans. McGraw-Hill’s performance underscores the positive impact a combined direct and indirect lending strategy can have on a credit union.

TOTAL NEW AUTO LOANS OUTSTANDING
Data as of Dec. 31, 2014 for McGraw-Hill Federal Credit Union
© Callahan & Associates | www.creditunions.com

McGraw-Hill_NewAutoGrowth_4Q14

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

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McGraw-Hill offers instant decisions for online loan applications and 100% financing including tax, tags, and extended warranties. Additionally, the credit union offers a vehicle leasing program through a third-party provider for certain vehicles.

Gains in auto lending have led to a larger and more engaged membership. Membership grew 18.3% during 2014 at the credit union, well above the 1.8% average of its asset-based peers between $250 million and $500 million. Auto loan penetration was 67.0% at McGraw-Hill at year-end 2014, almost four times higher than the 17.3% average for its asset-based peers.

 
 

Feb. 12, 2015


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