Credit Union Auto Lending Monthly Report
This report offers monthly analysis of credit union auto lending trends in comparison to banks and other auto finance companies, based on Equifax Analytic Dataset. This analysis is the first of its kind.
Credit unions continue to be the affordable choice for auto financing
It is crucial for consumers to secure financing that will help lower their monthly payments, ensuring access to affordable transportation and financial stability. Credit unions continue to be the preferred choice by consumers seeking to achieve this goal. As member-owned and not-for-profit financial institutions, credit unions remain mission-focused, offering lower interest rates for auto financing than other lenders.
Additionally, CUNA’s analysis of Equifax’s dataset revealed that non-prime borrowers at credit unions achieve significant life-of-loan savings compared with similar borrowers at banks and auto-finance companies. The lower the credit score of borrowers, the greater the life-of-loan savings.
Finally, lower monthly payments also contribute to improved payment performance among credit union members, as the percentage of loans that are 60+ days late is lower compared to other lenders.
Read the most recent report
October 2023
September 2023
July 2023
A note on data revision occurring June 2023
In the April edition of the auto lending report, we included a note stating that the numbers for banks and auto finance companies were under revision and subject to change. In the June 2023 report, we received a major update from Equifax, which revised the historical data going back to 2005. The revision affected the total outstanding balances and originations for banks and auto finance companies, but no changes were made to credit union originated loans. As a result of this update, the total loan balance for banks aligns with call report data from the FDIC.
This revision involved the reclassification of industry codes for a significant amount of loan balances. Despite the acquisition of auto finance companies by several large banks at different times, the reporting to the credit bureau did not accurately reflect these transitions in a timely manner. The revision corrects this issue by recategorizing loans previously reported under auto finance companies as banks.
The revision has impacted certain aspects of the previously reported numbers. The main changes are as follows:
- Loan distribution: The share of non-prime lending for banks is now higher compared to the previous reports. Reclassified loans consist of a disproportionately large balance extended to non-prime borrowers. These loans are made by previously auto finance companies (now owned by banks) that specialize in serving consumers with lower credit scores at high interest rates.
- Delinquency: The percentage of loans that are 60+ days late is now higher for banks and auto finance companies compared to our previous reports. The gap with credit union delinquency has also increased, indicating that credit union members are more resilient.
- Loan Pricing and Life of loan savings: Previous reports show that credit union members, particularly those at the lower end of the credit score spectrum, are more likely to receive affordable loans than borrowers at other institutions. This update strongly reinforced this finding. For example, the median 72-months interest rate in November of last year for deep subprime credit union borrowers was 30% lower than bank borrowers in the same credit profile prior to the update. Now, it is 44% lower.
Archive of prior reports
August 2023
June, 2023
April, 2023
March, 2023
February, 2023
