CU Auto Lending May Bring IRR Gods’ Wrath
That two-door hatchback with the spiffy, cushy interior bought back in 2003 may be on its last wheels.
And if industry data offers any proof, more drivers are turning in their clunkers for newer models. That transition is helping to fuel car loan growth for credit unions and other lenders.
“Low rates have made vehicles more affordable, and while our partners are always looking to generate more quality auto loans for their pipeline, I have seen little evidence of a trend towards the availability of terms greater than 72 months or an occasional 84 months,” Martin said.
Credit unions that offer these longer durations with a fixed rate may make them vulnerable to additional interest rate risk, Colby cautioned.