Auto Loans’ Latest Boost Driven by Aging Fleet
Member demand for both new and used vehicles is up due in large part to the aging vehicle fleet at dealerships across the country.
That’s according to CUNA Mutual Group’s April Credit Union Trends Report, which tracked data through February.
Total vehicle loans climbed 1.2% during the past year. However, even with this gain, loans are $16 billion off their previous peak, the data showed. After an early year surge, sales levels are expected to pull back as consumers adjust plans based on higher prices at the pump, according to Dave Colby, CUNA Mutual chief economist.
Meanwhile, used vehicle demand continues to improve in most markets. Year-over-year growth of 5.8%, translated into $6.0 billion in additional loans.
The current national average used vehicle loan rate is 4.45%, according to the trends report. The
6.3% decline in the new vehicle component is a $3.9 billion decline.
Colby said early forecast estimates show total vehicle portfolio growth above 2.0% in 2012, primarily due to less of a drag from the new vehicle component.