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CUDL CUs increase auto lending market share
RANCHO CUCAMONGA, Calif. (11/10/08)--Despite a tough market, credit unions’ auto lending shares increased this year, according to Joe James, a market research analyst at CUDL. In August, credit unions’ share was 20.5%. More than 550,000 loans were financed on the CUDL platform for 600 credit unions, he said. CUDL is a credit union service organization that develops applications, training and marketing programs related to indirect lending for credit unions. Credit unions have an advantage in the auto lending market because they have a lower cost to secure funds to borrowers. They reported that their costs to secure funds were at 3.3%, compared with the 4.7% of costs reported by the Consumer Bankers Association, James said. Credit unions also can expect an increase in lending because many large automakers have pulled back their leasing programs. “The pullback in leasing should benefit credit unions because they offer low rates and extended loan terms,” he added. Both new- and used-vehicle sales have declined each month compared with last year’s sales, so consumers can expect a decline in used-vehicle prices. “Hopefully, that will result in an increase in used-vehicle sales,” James said. James also noted:
* Vehicle sales have dropped because buyers have fewer financing options to purchase the cars; * Fewer consumers are using home equity loans to purchase cars; and * New U.S. auto sales in September hit the lowest level in 15 years. Toyota experienced the largest decline, at 32.3%, and General Motors the least. GM’s decline was half of the others at 15% for the second quarter, James said.
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