Experian reported Thursday that credit unions continued to lose share of auto lending at the end of 2025, mostly to banks, but also to a slight and new resurgence in lending by finance companies.
Experian's State of the Automotive Finance Market report showed credit unions originated 19.6% of the number of auto leases and loans in the three months ending Dec. 31%, down from 20.2% a year earlier and 21.1% in the third quarter.
Banks' share was 29.3% in the fourth quarter, up from 27.1% a year earlier and up from 28.9% in the third quarter.
Captives' share was 27.6% in the fourth quarter, down from 30.1% a year earlier but up from 26.2% in the third quarter.
Credit unions' weakness in auto lending also showed up in its unusual shrinkage in its portfolio.
NCUA data pulled from Callahan's Peer Suite showed credit unions held $162 billion in new car loans Dec. 31, down 2.6% from a year earlier and down 0.8% from Sept. 30.
Used car loans stood at $322 billion, up 0.5% from a year earlier and down 0.6% from September.
Used car lending is credit unions' bread and butter, but banks ate their lunch in the fourth quarter, widening their lead in market share.
Banks led with 30.7% of used car loans in the fourth quarter, up from 28.6% a year earlier and 29.7% in the third quarter.
Credit unions originated 26.6% of used car loans, down from 27.6% a year earlier and 28.0% in the third quarter.
Credit unions were the largest lender type for used car loans in 2022 and 2023, but banks regained their lead in the fourth quarter of 2024.
The fourth quarter also showed more subprime borrowing, which contributed to finance companies increasing their share of used car loans to 21.5% in the fourth quarter from 20.6% a year earlier.
Including both new and used loans and leases, subprime borrowers made up 15.3% of financing, up from 14.5% a year earlier and their largest fourth-quarter share of the total vehicle finance market since 2021.
"Recent growth in the subprime segment reflects sustained consumer demand for vehicle financing, even as market conditions continue to shift," Melinda Zabritski, Experian's head of automotive financial insights, said. "As affordability remains top of mind, both lenders and consumers are adapting, reflecting broader trends in credit patterns and vehicle financing behavior."
In the new car market, banks have generally been gaining share over the past year as captives and credit unions lose it.
Banks led with 33.7% of new car loans in the fourth quarter, up from 31.9% a year earlier and unchanged from the third quarter.
Credit unions originated 14.2% of new car loans, up from 13.1% a year earlier and down from 15.9% in the third quarter.
Banks even cast shade on refinancing, which has long been dominated by credit unions.
Credit unions' share has hovered just below 65% over the past five quarters, while banks' share rose from 23% at the end of 2024 to 24% by the end of 2025.
Borrowers still tend to save more when they refinance their auto loan through a credit union. Experian showed the average monthly savings with a credit union refi was $99 in the fourth quarter, compared with $65 through a bank and $39 through a finance company.
For all lenders, the 60-day-plus delinquency rate was 1.00% Dec. 31, up from 0.94% a year earlier. For credit unions, 2025 ended with a 0.96% delinquency rate for new and used cars, unchanged from a year earlier.
The average loan amount for a new vehicle was $43,582 in the fourth quarter, up 6.4% from a year earlier, while payments rose only 2.8% to $767. Used loans rose 3.3% to $27,528, while payments rose only 1.7% to $537.
Lower interest rates helped a little; longer terms helped more.
"Despite shifts in average loan amounts and monthly payments, we're seeing the market adapt," Zabritski said. "Consumers and lenders are finding ways, such as extending loan terms, to make the financing fall within a budget."
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.