A year ago, many credit unions were celebrating vehicle loanportfolio growth driving into positive territory.

The industry has more reason to revel as credit unionsexperienced a $14.3 billion increase in vehicle loans in 2012, according to CUNA Mutual Group'sFebruary Credit Union Trends Report. This translated intoan 8.5% annual growth, which was the best performance since 2005,the data showed.

The annual growth rate for new vehicle loans (8.9%) surpassedthe used vehicle loan growth rate (8.3%) for the first time sincemid-2007, according to the report.

While detailed year-end 2012 data won't be available for atleast another month, third quarter 2012 results showed the changein indirect loans accounted for more than 50% of the annual andyear-to-date increases in total vehicle loans outstanding, thereport noted.

The big question is will credit unions be able to maintain thispositive momentum?

“I believe the answer is yes. We assume new vehicle sales willremain strong enough, above the 15 million unit annual rate,manufacturers will continue to ease off on subsidized financingincentives and credit unions will remain very competitive onrates,” said Dave Colby, CUNA Mutual chief economist.

The December 2012 national average credit union new vehicle loanrate estimate is 3.44%, down 56 basis points since December 2011,Colby said.

Overall, total loan growth finished 2012 at 4.4%, a marked improvement overthe past three years, Colby pointed out. Vehicle loan growthaccounted for 55% of the gain, first mortgages 48% and memberbusiness loans at 15%. Final data will likely show record loanoriginations at credit unions in 2012, he added.