510 Largest CUs Account for 80% of Auto Loan Growth
Credit unions with assets ranging from $404 million to $52.4 billion accounted for 80% of vehicle loan growth in 2012.
According to CUNA Mutual Group’s March Credit Union Trends Report, the industry’s total vehicle loan portfolio increased in each of the past 12 months and now stands at $15.6 billion or 9.3% above the January 2012 level. As a result, annual growth in January is at its highest level in more than seven years.
Meanwhile, 49% of credit unions reported positive vehicle loan growth and the 510 largest credit unions by asset size accounted for 80% of 2012’s gain. The 197 billion-dollar credit unions also accounted for 57.9% of that growth. On the other end, a total of 145 credit unions of the 510 in the large credit union category group reported declines in their auto loan portfolios.
Among the factors that have led to strong auto loan activity are the robust sales of stronger, new light vehicles, less generous financing incentives from captives and lower rates at credit unions, noted the report, which tracked data through January.
Indeed, new vehicle loan rates were down almost 0.5% over the past year to 3.41%. The $6 billion gain in new vehicle loans accounted for 22% of all credit union loan growth during the past year, the data showed. The 8.9% gain in used vehicle loans is the best performance since early 2004, according to the report.
“The nation’s credit unions are helping consumers and members lead the recovery. Record mortgage refinances improved member household cash flow and falling vehicle loan rates helped make vehicle replacement more affordable,” said Dave Colby, CUNA Mutual chief economist.
Still, while first mortgage originations were up 50% in 2012 and total loans granted climbed 26%, payoffs, amortization and interest rate risk management held annual loan growth to 4.6%, Colby pointed out.
“While not robust, growth trends have steadily improved since mid-2011,” Colby said.