With more consumers choosing to lease a new car, that option could have an impact on auto loans originated at credit unions.
According to Equifax and Moody’s Analytics’ CreditForecast.com, total auto lease balances increased 9% in March over activity in March 2011.
That percentage was more than twice the growth rate of auto loan balances, which grew 4.2% during the same period, the data showed.
Leases are poised to grow by nearly 50% by the end of 2017, said CreditForecast.com, which tracks consumer credit data and forecasts.
Since auto finance companies tend to originate more auto leases, fewer auto loans at credit unions, banks and other lenders might occur, some industry watchers have noted.
CUNA’s latest industry data showed new auto loans represented 10.1% of credit union loan portfolios as of March. The percentage was down slightly from 10.8% in March 2011. Used auto loans grew from 18% last March to 18.7% in March of this year.
Finance companies have a 10% capture on lease financing among all U.S. auto lending, according to the firms. Lease balances increased by 11% in March from a year ago.
Through the end of 2017, they are expected to grow at an 8% average annual rate. Meanwhile, auto loan balances are set to increase between 2% and 3% annually during the same period.