Credit unions on the CU Direct auto lending platform are on pace for record volume this year, said Jerry Neemann, executive vice president for automotive.
“We’re expecting another record year,” he told Automotive News in a phone interview on Tuesday. “The last two years have been records, but I see it continuing.”
CU Direct, of Ontario, Calif., administers Credit Union Direct Lending, better known as CUDL, the largest auto lending service network for credit unions in the country. CUDL has more than 1,100 credit unions signed up, and approximately 12,000 dealerships, about 80 percent of which are new-car stores.
For the first quarter of 2015, loan volume was 250,000 units, up 21 percent vs. the first quarter last year. Application volume was 960,000, up 27 percent. Based on first quarter results, Neemann said, CUDL expects full-year 2015 applications to reach 3.8 million to 4 million and full-year funded loans to reach 1.1 million to 1.2 million.
For all of 2014, application volume was about 3.4 million, an increase of about 34 percent from 2013. Funded loans were 940,000 in 2014, up 31 percent.
In January, loan volume via CUDL was up 18 percent from the year-earlier month; in February, it was up 22 percent, and in March, loan volume rose 23 percent, CUDL said.
Many new credit union members initially sign up for membership as part of the process of getting a loan at a dealership, Neemann said.
In the first quarter, new members accounted for 58 percent of indirect loans generated at CUDL, the group said. About 66 percent of new credit union members who got an indirect loan purchased a used vehicle, compared with about 58 percent of borrowers who already belonged to a credit union, CUDL said.
“Credit unions have educated the membership to shop, research, get approved for a car, then get to a dealership and the dealer can facilitate it,” Neemann said. At the same time, he said, “Dealers choose to use credit unions, and they create customers as new members, to take advantage of an opportunity for that particular customer.”