AURORA, Colo. — Credit unions (CU) are offering borrowers longer loan terms to help offset the rising costs of new- and used-vehicle prices in one of the leading drivers that have helped CUs snatch greater market share last quarter.
CU share of new-vehicle loans with terms 84 months and longer clocked in at 49% in the second quarter, up from 37% in Q2 2019, according to JD Power data. That’s largely due to the fact that captives have little appetite for longer term loans in a crunched inventory environment, Thomas King, chief product officer and president of JD Power’s data and analytics division, said at the Origence Lending Tech Live Conference in Aurora, Colo., on Tuesday.
Credit unions “are catching almost half of all 84-month loans on new vehicles. This is primarily because the captives haven’t aggressively gone into the space,” King said. “They want to keep folks coming back.”
A similar story is playing out in the used market, King said. In fact, CUs held 65% share of 84-month loans for used vehicles at franchised dealerships in Q2, up from 58% in Q2 2019, according to JD Power data.
