Credit unions gain share in auto finance

Credit unions gained auto finance market share in the second quarter in tandem with growth in their auto portfolios during the first half of the year. Corning Credit Union (CCU)’s auto portfolio rose 3.5% from yearend 2024 to June 30, landing at $372.9 million, Marcus Wilson , indirect lending relationship manager, told Auto Finance News . “Through April, we had strong auto growth,” he said, noting a large driver was a pull-forward in vehicle purchases after auto tariffs were announced. Auto volume “slowed down consistently across the board” after an initial uptick “but a lot of dealers have stayed steady since then.” The Corning, N.Y.-based credit union serves local consumers as well as those in the Wilmington, N.C., region, areas of Horry County, S.C., and several counties in Williamsport, Pa., according to the financier. CUs gain share Across total automotive lending, including new- and used-vehicle loans and leases, credit unions held 21% of the market in Q2, up 69 bps YoY, according to Experian ’s State of the Automotive Finance Market report published Aug. 28. By comparison, bank share rose 300 bps YoY to 27.5% and captive share declined 354 bps YoY to 26.6%. [caption id="attachment_58354699" align="aligncenter" width="1024"] (Courtesy/Experian)[/caption] Credit union share in Q2 trended as follows, according to Experian: Loan share rose 58 bps YoY to 23.9%; New-vehicle financing share increased 225 bps YoY to 12.2%; New-car loan share landed at 16.8%, up 249 bps YoY; and Used-vehicle loan share ticked down 4 bps YoY to 27.6% Several credit unions have reported auto-loan volume growth this year. Dort Financial Credit Union , based in Grand Blanc, Mich., saw retail originations grow 30% from yearend 2024 through Aug. 25 to $97 million, Sharon Lobo , chief lending officer, previously told AFN . Oregon Community Credit Union ’s auto originations rose 101.5% YoY to $858.7 million year to date through July and were up 118.7% YoY in Q2 to $371.6 million, according to data provided to AFN . Gaining share in new vehicles While credit unions typically lead in the used market, they gained new-vehicle loan share alongside banks as captives lost share amid targeted incentives and auto tariffs . [caption id="attachment_58354700" align="aligncenter" width="1024"] (Courtesy/Experian)[/caption] CCU is keeping an eye on the competition as other lenders, including some banks, lower rates in anticipation of the Federal Reserve potentially cutting rates as soon as Sept. 17 and as rates stabilize, Wilson said. “We've seen some interest rates, especially [at] banks, have started to lower,” he said, noting the lender compares published rates in the market. “We just lowered ours by 50 basis points about a week ago. ... We see credit unions are holding steady right now.” CCU is offering rates for auto loans as low as 5.49% APR for qualified borrowers and 0% APR with no payments for three months on refinancing for auto, motorcycle, RV and boat loans, according to the lender. Credit unions typically target consumers in prime and super prime segments, Wilson said. “Those members are always looking for lower rates,” he said. “We want to make sure we can capture those.” Super prime share across both new and used loans rose 281 bps YoY to 31.8% in Q2, according to Experian. All other segments saw a dip YoY, with prime share down 186 bps YoY to 35.5% and subprime share at 14.6%, down 31 bps YoY. [caption id="attachment_58354698" align="aligncenter" width="1024"] (Courtesy/Experian)[/caption] Affordability challenges High payments, elevated interest rates and rising delinquencies continue to challenge consumers and are at the forefront for lenders, CCU’s Wilson said. “You have to keep your pulse on just about everything while staying competitive,” he said. In fact, average amounts financed for new and used cars rose in Q2, up 2.5% YoY to $41,938 for new vehicles with an average monthly payment of $749 and 1.8% YoY to $26,795 for used cars with a payment of $529 per month, according to Experian. The average loan term sat at 68.87 months for new-car loans and 67.24 months for used-car loans, compared with 68.46 months and 67.23 months, respectively, in Q2 2024. “Longer loan terms are always an option for consumers hoping to maintain a lower monthly payment, and with new- and used-vehicle costs remaining elevated, it’s a natural byproduct,” Melinda Zabritski , Experian’s head of automotive financial insights, told AFN . With rates higher, shorter-term loans could be a lever consumers pull to cut down on interest costs, she said. “Although the monthly payment may be higher, it’s an opportunity for consumers to pay less interest over the life of the loan,” she said. Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 15-17 at the Bellagio Las Vegas. Learn more about the 2025 event and register here .

Credit unions gain share in auto finance

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