Three months after Hurricane Sandy’s destruction slammed several states, the storm may have contributed to a jump in loans for new cars at credit unions.
This segment of the loan portfolio is up 7.7% or $4.6 billion as of November, according to CUNA Mutual Group’s January Credit Union Trends Report. The scenario was different in November 2011 when new car lending activity was actually contracting at an 8.7% annual rate, the data showed.
Both new and used car lending continued to lead the way in loan growth at credit unions. The 7.7% annual growth rate for the total vehicle portfolio is the strongest since February 2006, according to the report.
“Member purchase demand and demand from loan recapture programs is keeping used vehicle loan growth solid. The 7.7% annual gain translates into $8.3 billion in additional loans on the books,” said CUNA Mutual Chief Economist Dave Colby. “Our forecasts indicate vehicle loan growth will continue to be a key driver of overall credit union loan growth well into 2014.”
Auto lending has now increased in 18 out of the past 20 months as interest rates on new and used vehicle loans continue to decline, Colby pointed out.