CUs Stand Out in Latest Auto Lending Snapshot

Image of seller and buyer at auto dealership

Experian recently released auto-finance trends for the second quarter of 2018, giving insight for credit unions and other lenders into the state of car/truck lending across different types of institutions and companies—and under various consumer credit circumstances.

Highlights from the credit analytic company's year-over-year 2Q 2018 State of the Auto Finance Market report are as follows:


  • Experts caution against a looming U.S. auto sales slowdown, but credit unions continue experiencing the highest quarterly loan growth compared to other lenders. Overall, auto loan balances reached another record high (hitting $1.15 trillion), with credit unions now making up 29 percent of this financing (banks were 32 percent, captive finance 23 percent, and third-party finance 16 percent). However, total loan growth is slowing.
  • The “non-prime” credit category fell below 19 percent of total auto loan balances for all lenders while both “prime” (43 percent) and “super prime” (20 percent) increased. “Subprime” and “deep subprime” both fell slightly (to 15 percent and 3 percent). Additionally, the largest year-over-year loan balance change was in super prime (6.5 percent) and prime (6 percent).
  • The average loan amounts for all types of used vehicles (dealer, independent, etc.) hit a record high. This figure approximately ranged between $15,100 - $21,400 depending on credit category (deep subprime, subprime, nonprime, prime and super prime). Additionally, for all credit categories the average new car loan was $30,960; average all-types used was $19,700; average dealership used was $21,500; and average independent used was $17,150.
  • The average new-car purchase monthly loan payment hit an all-time high of $525. This figure approximately ranged between $498 and $543 depending on credit category (deep subprime, subprime, nonprime, prime and super prime). The average new-car lease monthly payment ranged between $425 and $458 depending on credit category.
  • 30-day loan delinquency rates improved for credit unions and third-party finance companies, but they rose for captive finance and banks. Overall, third-party finance held the worst delinquency rate (4.2 percent), then captive finance (2.6 percent), then banks (1.75 percent), and lastly credit unions (1 percent). Total auto lending industry 30-day loan delinquency stood at 2.2 percent. Filtering by state, California (1.87 percent) leans toward the lower end of the delinquency spectrum and Nevada (2.34 percent) is approximately in the middle. The extremes on either side are North Dakota (1.08 percent) versus Mississippi (3.71 percent). (Also, total 60-day delinquency was 0.63 percent)
  • Other year-over-year trends include the following: The second quarter of 2018 continued a series of record-high loan balances, with credit unions maintaining double-digit growth. Overall delinquency has improved, driven by reductions in the credit union and third-party finance company space. Leasing remains more than 30 percent of all new consumer vehicle sales, yet it decreased year over year. Credit scores improved as lending continued to shift into more “prime’ segments. Subprime lending reached record lows (for second quarter compared to previous second quarters) driven primarily by lows in used financing. Loan amounts remain high with payments rising as interest rates increase.

For more trends from Experian’s report, click here!

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