Vehicle loan portfolio expansion continues to be the drivingforce behind credit union loan growth.

According to the April edition of CUNA Mutual Group's CreditUnion Trends Report, auto loans accounted for 72% of theannual gain for the industry in 2012.

CUNA Mutual Chief Economist Dave Colby said the year-to-date gain of 1.3% also isimpressive given that the vehicle loan portfolio usually contractsin the first couple months of the year.

At $184 billion, vehicle loans were up 9.5% year-over-year and11.5% or $19 billion above the cyclical low in March 2011,according to the trends report. Since February 2012, increases invehicle loans accounted for 54% of all credit union loangrowth.

“Anecdotal market evidence points to continued strong memberdemand for new and used vehicle purchases,” Colby said.

The $9.5 billion gain in used vehicle loans accounted for almost 33% of all credit unionloan growth since February 2012, the data showed.

Colby said detailed year-end 2012 data showed loans classifiedas indirect increased $7.8 billion or 10.9%. The change in theseloans equaled 57% of the change in total vehicle loans outstandingat credit unions in 2012, he added.

Meanwhile, some lenders are eyeing loans with terms ranging from65 to 97 months to accommodate those borrowers who wantnew cars but with lower payments.

Melinda Zabritski, director of automotive credit at ExperianAutomotive, recently told the Wall Street Journal that thelenders most likely to offer these longer term loans are creditunions and independent banks.