Credit unions on CU Direct’s auto lending network as a group have become the second largest auto financing source this year through September, knocking Ally Financial to the No. 3 spot, CU Direct said last week.
Wells Fargo Dealer Services so far is the 2016 leader. At the end of 2015, Ally had ranked No. 1, Wells Fargo, No. 2 and CU Direct, No. 3.
Together, the more than 1,000 credit unions using CU Direct’s CUDL lending platform have been the third largest financing source in the U.S. for the past two years. CU Direct’s CUDL platform connects credit unions to more than 13,000 dealerships nationwide.
“Our goal has always been to help our partner credit unions and auto dealers create efficiencies and grow their overall market share,” Tony Boutelle, CEO of CU Direct, said in a statement. He added to Automotive News this week: “The brand for credit unions is auto lending. I think you’re going to see credit unions continue to be aggressive going into 2017,” serving members as well as dealers.
Credit unions on CU Direct’s network have the highest loan origination growth rate, at 15.4 percent, among the top nine lenders in the U.S., the statement said. Through September, CU Direct credit unions originated 825,712 loans while Ally’s originations dipped 11 percent to 814,691. Wells Fargo’s originations rose 3.6 percent to 897,578.
As a whole, credit unions account for 22 percent of the auto finance market, behind banks’ 37.5 percent share, according to Experian’s AutoCount unit.
Credit unions in the CU Direct network have renewed efforts over the past several years to capture dealerships’ business. “There’s been a steady growth and build through the indirect channel to provide financing to not only [credit union] members” but also to dealership customers overall to grow their lending base, Bill Meyer, spokesman for CU Direct, said in June.
Ninety percent of CU Direct’s auto loans are financed through dealerships. Auto lending now makes up one third of all credit unions’ loan portfolios, and it is growing faster than each of credit unions’ other lending segments.
Boutelle said credit unions are “getting better at using the tools to be more efficient and better at building relationships with dealers and funding them fast.” They’re “looking at dealers as customers as much as they look at their members as customers,” he said.