Credit unions led U.S. auto lending growth in the second quarter as other lender types pulled back, CU Direct said last week in its latest State of the Credit Union Auto Lending Market presentation.
Credit unions increased originations 5.9 percent, while banks' originations dropped 6.5 percent, captives' originations fell 2.5 percent and finance companies' originations slipped 1 percent.
"As lenders regroup and re-strategize, they will be back in the marketplace with new programs," said Michael Cochrum, vice president of analytics and advisory services for CU Direct. "Credit unions can't take our eye off the competition because they won't stay out of the market for long. The good news is in the meantime credit unions are increasing their loan originations in a shrinking market."
Combined new- and used-vehicle market share by lender type shifted just slightly from a year earlier. Banks held 36 percent of the market, down 2 percentage points; automakers' captive finance companies made up 24 percent of the market, up 3 percentage points; credit unions captured 18 percent, up 1 percentage point; finance companies had 13 percent, down 1 percentage point; and buy-here pay-here had 8 percent, down 1 percentage point from the year earlier.
Credit unions should prepare for competition by adjusting programs with dealerships, considering used-vehicle leasing and widening their credit spectrum, Cochrum told Automotive News.