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.
The increase in repossessions was limited entirely to finance companies, which typically provide loans to the subprime market, according to Experian. Finance companies saw their repossession rate jump 124.9%, rising from 1.18% in Q3 2012 to 2.66% in Q3 2013. Meanwhile, repossession rates for captive finance companies, banks and credit unions all dropped slightly in the quarter, the report noted.
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