But improved delinquency rates weren’t the only good news for credit unions.

Positive Credit and Finance Trends Unlock Opportunities to Capture Market Share

As lenders recalibrate their strategies, there was a notable shift in market share – revealing changes in how some lenders are performing across the finance industry.

In Q1 2025, the total market share for banks grew to 26.55%, from 24.79% in Q1 2024 and credit unions increased from 20.20% to 20.63% in the same period. Meanwhile, captives declined from 31.28% last year to 29.81% this quarter.

For new financing, captives accounted for the bulk of the market share at 57.08% this quarter, a decrease from 62.07% last year. On the other hand, credit unions increased from 9.62% to 10.89% and banks went from 20.37% to 24.13% year-over-year.

Banks led the used market at 28.37% in Q1 2025; however, credit unions matched the pace as they steadily narrow the gap, coming in at 28.24%, an increase from 27.88% and 27.71%, respectively. Captives slightly declined from 8.45% last year to 7.42% this quarter.

While banks’ resurgence in market share can likely be attributed to a recalibrated focus on automotive, credit unions picked up market share, particularly in the used space, as result of underlying consumer behaviors. Over the past few quarters, we’ve seen consumers finance older vehicles, a trend that favors credit unions.

For instance, 28.99% of credit unions’ share for loans were used vehicles from four to eight model years old, compared to banks (28.84%) and captives (6.31%) in Q1 2025. Furthermore, credit unions’ share for loans on used vehicle model years nine and older was 23.13%, while banks were at 13.36% and captives only accounted for 2.03%.

Additionally, with consumers leaning on longer term loans to help offset slight increases in loan amounts, credit unions serve as a viable option for in-market shoppers. In fact, nearly 70% of used vehicle loans were for 72-plus months in Q1 2025.

Navigating the Broader Finance Market Landscape

Given the evolving market share shifts, it’s also crucial to monitor overall finance trends as it continues to influence the lending environment and borrower behavior in the financial landscape.

In the first quarter of this year, there was moderate growth in new vehicle financing. The average loan amount increased $1,110 from last year to $41,720 this quarter and the average monthly payment went from $737 to $745 year-over-year. However, the average interest rate dropped slightly from 6.85% to 6.73% in the same time frame.

On the used side, the average loan amount saw a small uptick of $90 from last year, reaching $26,144 in Q1 2025. Meanwhile, the average interest rate declined from 12.36% to 11.87% and the average monthly payment dropped from $524 last year to $521 this quarter.

As prices begin to stabilize, specifically in the used vehicle market, it’s good news for credit unions given their strong focus on this segment. This trend offers a timely opportunity to reinforce their market presence and broaden their reach. Additionally, monitoring finance shifts – such as market share movement, delinquency rates and the growth in prime financing – provides credit unions with valuable insights that can support long-term planning.

Ultimately, a deeper understanding of overall consumer behavior and financial patterns enables credit unions to better align their strategies while offering tailored solutions that resonate with consumer preferences.