Auto lending up more than 30% at credit unions since 2012

by: Ashley Binder

It may still be early in the New Year, but the U.S. economy is looking promising for 2015. A resurgent job market (with 257,000 U.S. jobs added in January, following two very strong months in November and December) is most telling, and leaving many Americans with smiles on their faces. Along with steady job creation, wages are also on the rise. January also pointed to an average hourly wage shift – rising 12 cents to $24.75 in January, a jump of 0.5 percent. Over the past year hourly pay has risen 2.2 percent, well above the inflation rate of .8 percent.

These positive trends – job creation and more money in their pockets – may encourage consumers to spend more than they could just a few years ago. Two big ticket items – homes and cars – are on the minds of many consumers, and this could spell success for many credit unions.

The auto industry had a substantial year in 2014, selling nearly one million more vehicles than in 2013. In January the New York Times reported that 16.5 million new automobiles drove off the lot last year – the highest number since before the Great Recession. And just as in mortgage lending, credit unions are seeing a bigger piece of the consumer loan pie.

Utilizing the Bank Information platform, Sageworks recently examined how well U.S. credit union auto lending portfolios are faring. Credit unions reached nearly $225 billion in auto loans (this figure includes both new and used vehicle loans) for the quarter ending September 30, 2014, up from nearly $193 billion for the same period in 2013. The $225 billion figure in 2014 is also up dramatically since the same time just two years ago, when credit unions reported a total of about $173 billion in auto loan assets. Across the country used vehicle loans nearly doubled their new counterparts by lending volume.

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