Car loans in credit unions

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Graph showing that credit unions are losing market share in car loans.

An Experian report released on Thursday shows credit unions have continued their three-year model of issuing a smaller proportion of auto loans this spring.

Experian’s “State of the car finance market“The second quarter report shows that credit unions generated 18.2% of auto loans in the three months ended June 30, up from 17.2% in the first quarter and 18.8% a year earlier.

According to the second quarter, the credit union peaked at 22.7% in 2018, falling to 19.8% in 2019.

Meanwhile, banks and captive lenders have increased their share. Banks provided 30.9% of loans in the second quarter, compared with 29% in the first quarter and 28.8% a year earlier.

The share of captives in the second quarter was 29.7% compared to 28% in the first quarter and 29.3% a year earlier.

The trend was reflected in data earlier this month from Fed G-19 Consumer Credit Report and CUNA, which showed that the share of credit unions based on outstanding loans was 30.6% in June, up from 31.7% in June 2020 and 31.1% in March. The peak was 32.6% in December 2018.

Credit unions maintain a higher percentage of loans in their portfolios, while other lenders sell more loans in the secondary market.

For credit unions and other lenders, delinquencies were low. Among the top 10 credit unions by asset size, loans overdue by 60 days or more accounted for 0.37% of balances as of June 30, up from 0.58% a year earlier and 0.69% two years earlier.

Among all lenders, Experian found a 60-day delay of 0.36% on June 30, up from 0.39% a year ago and 0.59% two years ago.

Experian also found that prices and payments rose sharply from two years earlier before the COVID-19 pandemic.

Experian found that borrowers financed an average of $ 35,163 for new cars in the second quarter, down 2.7% from a year earlier and 8.7% more than two years earlier. Monthly payments for new cars were $ 575 in the second quarter, up from $ 570 a year earlier and $ 555 two years earlier.

The average loan for a used car in the second quarter was $ 23,365, up 9.4% from a year earlier and 14.8% more than two years earlier. Monthly payments for used cars were $ 430 in the second quarter, up from $ 397 a year earlier and $ 390 two years earlier.

Interest rates are lower than two years ago, but buyers are spending more, in part because they increasingly prefer large and expensive SUVs, SUVs and trucks.

Cox Automotive said Wednesday that the supply of unsold used cars at US dealerships rose to 2.44 million vehicles at the end of July, up from 2.40 million a month earlier. Stocks of used cars have increased by 12% since the end of July 2020, but are still down 14% compared to July 2019.

Charlie Chesbrough, senior economist at Cox Automotive, said prices are higher due to a shortage of new cars due to a shortage of microchips, which in turn has increased the demand for used cars.

“For consumers, finding a used car at an attractive price is a huge challenge in today’s marketplace,” Chesbrough said. “Sales have been slowly dropping in recent months due to limited availability and high prices, but that’s not enough to alienate potential buyers. The situation is unlikely to improve significantly until supply problems in the new market begin to be corrected. ”

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