A TransUnion blog is reporting that credit unions are capturing a growing share of the auto finance marketplace.
Between 2013 and 2018, credit unions’ market share of the auto loans rose 8 percent.
TransUnion cited several factors contributed to this market share gain.
TransUnion reported that credit unions took advantage of banks tightening their underwriting of auto loans between the third quarter of 2016 thru the fourth quarter of 2017. Credit unions gained market share across all credit tiers, except subprime.
In addition, credit unions were undercutting their competition with respect to interest rates on auto loans and extended the terms of these loans. TransUnion found that credit unions were capturing 55 percent of the share of auto loans with maturities between 76 and 84 months and 53 percent of the share of loans beyond 85 months in maturity. While extending the maturity of the auto loan makes car payments more affordable, consumers will pay more in interest over the life of the loan.
Credit unions have increased their share of used car financing to grow their auto finance market share.
TransUnion also observed that credit unions are dominating the auto refinance market.
Read the blog post.
Growth via longer terms and weaker underwriting....what could go wrong?
ReplyDeleteCan anyone say, "taxi medallions?"
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