ONTARIO, Calif. (4/15/09)--Credit unions continued to maintain a strong market presence in the auto lending arena in the first quarter of this year, with a 24.8% market share in February, according to CUDL.
CUDL is a point-of-sale and indirect auto lender for credit unions. It became the third largest lender of auto loans in January, behind Chase Auto Financing and Toyota Financial Services.
About 936 U.S. dealerships closed last year due to lack of financing. Lenders who relied on asset-backed securities to make auto loans have run out of funds because there are fewer financing sources, according to Joe James, CUDL market research analyst.
Credit unions continue to lend, even though some major lenders do not. Auto loans make up one-third of credit unions' portfolios, James said.
General Motors (GM) and Chrysler were the top cars financed in the first quarter of 2009 on the CUDL platform, at 19% and 18%, respectively. This is because of the Invest in America program, James said. Invest in America is a credit union auto loan discount program that offers incentives to credit union members who buy qualifying GM and Chrysler vehicles.
Credit unions have seen an increase in charge-offs and delinquencies, but it's much lower than that of banks, he added.
"Credit unions are still offering low [interest] rates to members," James said.
Loan terms also have shifted. Right now, 60-month loans are the most common for credit unions--a shift from 72 months last year. "Credit union members are seeking shorter terms," James said.
courtesy of cuna.org