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Auto Lending Research Reveals Significant CU Member Savings

Credit unions continue to fulfill their mission through extremely favorable auto lending interest rates, according to Credit Union National Association’s (CUNA) inaugural Credit Union Auto Lending Monthly Report. The report — covering September 2022 — shows consumers on the lowest end of the credit score spectrum average approximately $13,200 in life-of-loan savings compared to other lenders.

“Access to reliable transportation is a foundational aspect of financial well-being for consumers,” said CUNA Chief Economist Mike Schenk. “The significantly lower average monthly auto loan payments result in substantially higher levels of financial resilience among credit union members compared to non-members.”

National trends in credit union auto lending in September 2022 include:

  • Credit unions’ market share reached 31 percent in September, up from 28 percent same period last year.
  • Credit union balances grew by 17.4 percent over a 12-month period ending in September and 16.5 percent year-to-date.
  • Credit unions’ market share of new loan originations reached another peak in September 2022 at 42.5 percent, making these member-owned depositories the top auto lender in the county. Credit unions captured 30 percent of the market same period last year.
  • Credit unions’ performance in new loan origination has been strong this year while other lenders generally experienced declines in balances. The year-to-date growth rate in origination for credit unions as of September was 28.2 percent higher compared to the previous year.
  • Credit unions extended more loans to nonprime credit score borrowers compared to other depository institutions. Non-prime borrowers account for 23 percent in September 2022 compared to only 14 percent at banks.
  • Credit union loan pricing is generally very favorable across the credit score spectrum. In September, the typical consumer with an average credit score who financed a six-year $40,000 auto loan at a credit union would pay an annual interest rate of approximately 5.45 percent — below the 6.86 percent bank average rate and well below the 7.64 percent average rate at a finance company.
  • The payment performance of all nonprime borrowers is substantially higher at credit unions than at banks. This is due in part to lower interest rate at credit unions which makes loans affordable to members. The 60-plus days delinquency rate in September 2022 for credit unions at 0.24 percent is the lowest in the industry (0.1 percent for prime borrowers and 0.7 percent for non-prime borrowers).

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