ATLANTA (7/7/11)--Auto loan originations for first quarter 2011 rose 20% over originations during first quarter 2010, according to Equifax's May 2011 National Credit Trend Report. While that is a good trend, credit unions will need to improve their share of the auto loan market--what historically has been termed their bread and butter. Credit unions' new-auto loan balances declined 16.5% in 2010, while used-auto loan growth increased modestly (3.4% ), says Credit Union National Association's U.S. Credit Union Profile Year-End Summary for 2010
. Last year, credit unions' market penetration was 5% for new-auto loans and 11.4% for used-auto loans. Yet, 94.7% of credit unions offered new-auto loans and 95.7% offered used-auto loans last year. In March 2011, auto loan originations nationwide represented $1.8 million, the largest monthly total since summer 2008, said the report from Equifax, a credit information solutions provider. That total eclipsed the $1.6 million monthly totals driven by the "Cash for Clunkers" program in summer 2009. During first quarter, lenders made $87 billion in new-auto loans--a 21% increase over the loans in first quarter 2010. For March, loan amounts totaled $33.6 billion, up from $30 billion in the same month last year. The loans continue to approach pre-recession lending levels for $34.7 billion in March 2007. Other findings among Equifax's statistics for March:
* Average auto loan amounts among all borrowers were relatively unchanged from March 2010. Credit unions, banks and savings and loans originated loans averaging $18,661, compared with $18,463 in March 2010. Auto finance companies originated an average $19,013 loan, compared with $19,236 for March last year. * Average new-auto loan payments among all borrowers are slightly lower than the same period's averages in 2010. Borrowers at credit unions and other financial institutions average a $366 payment, compared with $377 in March 2010. Auto loan companies averaged $397 versus $404 in March 2010. * Average loan amount for prime borrowers is about equal to or slightly higher than pre-recession levels. * Auto delinquencies and write-offs are approaching pre-recession levels , with both continuing to improve in 2011.
"While some sectors of the economy--most notably housing--continue to struggle, the auto lending sector has displayed positive gains on loosening of credit to both prime and subprime borrowers paired with improvements in consumer payment behavior, which is reflected in the declining number of auto loan delinquencies," said Michael Koukounas, senior vice president of special client services at the Atlanta-based Equifax. The study is based on data from more than 55 million consumers and 81 million businesses worldwide.