In the third quarter of last year, credit unions surpassed captive auto lenders to become the second largest lender type in the market. The latest results from Experian's “State of the Automotive Finance Market” report showed credit unions remain the second largest lender type in the market with $277 billion in open auto loans. Banks remain the largest lender type, with $364 billion in open loans, while captive auto lenders ($252 billion) and finance companies ($179 billion) rank third and fourth, respectively.

The automotive lending industry remains on an upward trend overall. In Q4 2016, total dollar value for outstanding loan balances reached a record high of $1.072 billion, up from $987 million in Q4 2015 and $886 million in Q4 2014. All lender types experienced growth year-over-year, led by finance companies (up by 22.4%) and credit unions (up by 15.87%). Banks and captives grew at much lower rates (7.64% and 6.26%, respectively).

Part of the reason for the all-time high loan balances is an escalation in the average loan amount for both new and used vehicles. The average loan amount for a new vehicle reached a record high of $30,621 in Q4 2016, while the average loan amount for a used vehicle jumped from $18,850 in Q4 2015 to $19,329 in Q4 2016.