Since 2009, auto finance companies have increased their lending by more than 47%.
According to Equifax’s latest National Credit Trends Report, 854,800 loans were originated from auto finance companies in July 2011 compared to 581,300 in July 2009.
Credit unions and banks originated 820,200 loans in July 2011 compared to 832,000 for July 2009, which amounts to a decrease of less than 2%.
Equifax said 38.5% of all auto loan originations from subprime borrowers now come from auto finance companies. The figure is 17.6% for credit unions and banks.
From January to July, 11.3 million new auto loans totaling $213.9 billion were originated, the report showed.
Delinquency rates continue to improve for those auto loans that are 60 or more days late, according to Equifax.
Meanwhile, in at least one case, banks and credit unions are nearly tied when it comes to the average rate on five-year, indirect new auto loans.
According to rate tracking firm Informa Research Services, credit unions had an average rate of 8.37% compared to 8.38% for banks as of Nov. 13. The indirect loan average applies to those who have credit scores between 625 and 640.
Credit unions are ahead of banks by a few points in other five-year, indirect loan categories. The average rate for those with credit scores between 680 and 719 was 4.38% at credit unions and 4.71% at banks for the period tracked.
There was a 21-point difference for those with credit scores between 650 and 679. The average five-year, indirect loan rate at credit unions was 6.26% and 6.47% at banks.
Still, overall, credit unions continue to offer lower rates on new, five-year auto loans, with the average rate being 3.53% compared to 4.94% at banks, according to Informa. For used, auto loans with terms between two and four years, the average rate at credit unions was 3.72% and 5.25% at banks.