Our analysis shows that there is a significant correlation between auto loan growth and the unemployment rate of the state in which the CU is located. North Dakota, for example, had a 2.9% unemployment rate in June 2012 with auto loan growth of approximately 13% over the last year.
It’s also no surprise that membership growth is correlated to auto loan growth as you have to be a member to get a loan. Could the hardships of the captive auto finance companies and credit unions’ willingness to lend in a challenging economic environment be driving the strong membership growth in the system?
It’s also no surprise that membership growth is correlated to auto loan growth as you have to be a member to get a loan. Could the hardships of the captive auto finance companies and credit unions’ willingness to lend in a challenging economic environment be driving the strong membership growth in the system?
Although we saw strong correlations with location and membership, the size of the credit union doesn't appear to be of any significance.
Although sales are still well below the pre-recession levels and the peak year of nearly 18 million units in 2000, they bottomed in 2009 and we've seen incremental increases the last two years.
Not only have unit sales been increasing but prices are appreciating as well, especially on used vehicles. Manheim Consulting tracks the value of used vehicles values and you can see that from June 2011 to June 2012 they have increased by 6%.
According to Polk, a company that focuses on auto market intelligence, the average age of vehicles on the road recently hit a record high of 10.8 years. Although vehicle quality has increased over the years, many consumers who have delayed purchasing in the economic downturn will need to buy replacements in the near future.
Although there many components and market dynamics that influence auto loan growth for U.S. credit unions, some key auto lending drivers appear to be providing some tailwinds for growth.
Although sales are still well below the pre-recession levels and the peak year of nearly 18 million units in 2000, they bottomed in 2009 and we've seen incremental increases the last two years.
Not only have unit sales been increasing but prices are appreciating as well, especially on used vehicles. Manheim Consulting tracks the value of used vehicles values and you can see that from June 2011 to June 2012 they have increased by 6%.
According to Polk, a company that focuses on auto market intelligence, the average age of vehicles on the road recently hit a record high of 10.8 years. Although vehicle quality has increased over the years, many consumers who have delayed purchasing in the economic downturn will need to buy replacements in the near future.
Although there many components and market dynamics that influence auto loan growth for U.S. credit unions, some key auto lending drivers appear to be providing some tailwinds for growth.
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