Credit unions are expanding their auto loan portfolios, which is helping with growth.
In Aprils addition of CUNA Mutual Group’s Credit Union Trends Report, auto loans now make up for 72% of annual gains in 2012.
CUNA Mutual Chief Economist Dave Colby said the year-to-date gain of 1.3% also is impressive given that the vehicle loan portfolio usually contracts in the first couple months of the year.
At $184 billion, vehicle loans were up 9.5% year-over-year and 11.5% or $19 billion above the cyclical low in March 2011, according to the trends report. Since February 2012, increases in vehicle loans accounted for 54% of all credit union loan growth.
“Anecdotal market evidence points to continued strong member demand for new and used vehicle purchases,” Colby said.
The $9.5 billion gain in used vehicle loans accounted for almost 33% of all credit union loan growth since February 2012, the data showed.
Colby said detailed year-end 2012 data showed loans classified as indirect increased $7.8 billion or 10.9%. The change in these loans equaled 57% of the change in total vehicle loans outstanding at credit unions in 2012, he added.
Meanwhile, some lenders are eyeing loans with terms ranging from 65 to 97 months to accommodate those borrowers who want new cars but with lower payments.
Melinda Zabritski, director of automotive credit at Experian Automotive, recently told the Wall Street Journal that the lenders most likely to offer these longer term loans are credit unions and independent banks.