Auto Repo Rates Go Up Among Subprimes
Credit unions continue to bask in the glow of their record auto lending growth, but an increase in subprime repossessions may be a cause for pause.
According to Experian Automotive’s latest State of the Automotive Finance Market report, the repossession rate was 0.62% in the third quarter, which was a 54.4% increase from the 0.40% rate during the third quarter in 2012.
Meanwhile, nearly half of all credit union loan growth this year can be traced back to auto loans, setting the stage for record expansion across the industry for 2013, said Dave Colby, chief economist for CUNA Mutual Group in the company’s November Credit Union Trends Report, which tracked data through September.
During the past year, auto loan portfolio expansion of $19.7 billion accounted for 48% of all credit union loan growth, the data showed. Vehicle loans now represent 30.7% of all credit union loans, up from a low of 28.7% at the end of 2011, but below the pre-recession level of 33.3%.