CUNA said lower monthly payments contributed to improved payment performance. The percentage of loans that are 60 days or more late is lower at credit unions than with other lenders.

CUNA's auto report has old data, but is important because it provides detail not available in its Monthly Credit Union Estimates, especially auto loan originations.

CUNA's report showed total auto originations were $51 billion in February, with credit unions producing 32.7% of that volume — little changed from a year earlier. Credit union's share rose to a peak of 40% in June 2022, but has generally declined since then.

Experian's quarterly "State of the Automotive Finance Market" report released June 1 also showed credit union share declining based on the number of automotive loans and leases. It found credit unions originated 24.5% of financing in the first quarter, which was lower than the previous three quarters, but better than the 22.1% share for 2022′s first quarter.

The credit union originations in January and February fell from year-ago levels, after strong gains last year.

While used car sales have lagged, new car sales have outpaced forecasts through June. On June 27, Cox Automotive said it expects 15.0 million new cars to be sold this year, up from its previous forecast of 14.2 million in March.

NAFCU Economist Noah Yosif said he expects "comparatively stable growth" in auto sales for the final six months of the year.

Noah Yosif

"Buyers within the vehicles market remain unfazed by lingering inflationary pressures and rising interest rates, buoyed by a tight labor market, steady wage growth and normalization in global supply chains," Yosif said. "Time remains on the side of buyers and the vehicles market at-large as the Fed's tightening cycle approaches a peak and inflation remains on a downtrend."

Credit unions had $480 billion in auto loans on their books Feb. 28 with non-prime borrowers accounting for 22.5% of the balance, a percentage that remained relatively stable month-over-month. Non-prime borrowers accounted for 28.7% of banks' outstanding balances.

Auto loan balances are tricky for comparisons because banks sell more of them than credit unions.

Auto loan rates have been rising among all lenders in the past year in response to rate hikes by the Fed.

"However, credit unions implemented rate increases at lower levels compared to other lenders," CUNA said. "For deep subprime borrowers, credit unions raised their median rate for a 72-month loan by 182 basis points between March 2022 and February. By contrast, banks increased their rates by 326 basis points during the same period."

For loans that originated in February, CUNA said bank rates were 20% to 72% higher than credit union rates.

Credit union near-prime borrowers (620-659) save about $5,700 compared to similar bank customers who face a 46% higher interest rate. Deep subprime borrowers (below 580) save over $11,000 compared to banks and $13,000 compared with finance company borrowers.

CUNA found the percentage of loans that are 60 days or more past due is rising, surpassing the pre-pandemic levels across all lenders.

"However, the delinquency rate at credit unions is about half of what it is at banks," CUNA said.

Delinquency rates were 0.66% for credit unions in February, compared with 1.22% for banks and 2.58% for auto finance companies. CUNA also found the credit union loan default rate was lower for borrowers across all credit profiles.