DALLAS (5/12/08)--During first quarter 2008, credit unions' vehicle loans outstanding declined at a 6% annualized pace, compared with a decline of 2% for the same period a year earlier, says Southwest Corporate Investment Services. Those loans increased less than 1% during all of 2007, Brian Turner, director of advisory services, said in LoneStar Leaguer (May 9). "The teetering economic climate and lack of meaningful auto-manufacturer incentive programs so far this year hasn't helped," Turner said. 2008 should be brighter. "We are about three years out of the massive 2005 auto manufacturers' employee discount pricing incentive program that helped to produce a 9.5% annualized growth rate for credit union vehicle loans outstanding," Turner said. "However, it also oversaturated the market, after which vehicle loan growth has only increased 3% the past two years combined, or less than half the 10-year average growth rate of 6.7%," he said. The average new-car rate for 60 months was 7% at commercial banks, 4.19% at finance companies and 6% at credit unions, he reported. Overall total vehicle sales dropped 7.8% year-over-year from 2007, largely because of a 14% decline in truck sales, which typically account for roughly 51% of sales. Car sales are down less than 1% from 2007. Turner noted that high gasoline prices, weak consumer confidence and tight credit are hitting the auto industry hard. First-quarter results are traditionally the weakest sales of the year for the industry, but the seasonal adjustment still points to some weakness, said Turner's report. Credit union share of the $944 billion revolving credit market was 6%, compared with commercial banks' 66% (excluding securitized assets).