Member Payoffs Help Boost New Car Loan Lows
New originations above amortizations and payoffs have started to reverse the new vehicle loan downturn for credit unions.
According to CUNA Mutual Group’s July Credit Union Trends Report, when combined with growing consumer demand for replacement vehicles, new and used loans were up in March, April and May.
The total vehicle loan portfolio rose to $171.6 billion in May. This reflected a 2.1% year to date gain and 3.7% year-over-year, wrote CUNA Mutual Group Chief Economist Dave Colby, in the trends report.
He described it as a remarkable turnaround given that last year at this time credit unions were reporting on a 3.1% portfolio decline.
The used vehicle portfolio was up 2.6% year to date and its 6.6% annual growth supplied more than 42% of all credit union loan growth during the past 12 months.
Credit unions also continued to improve their competitive position with respect to interest rates. The new and used national average vehicle loan rates, which were 3.74% and 4.30% respectively, are at historic lows, according to the report.