What’s Happened to the Market for Auto Loans?
According to CUNA Mutual Group’s Credit Union Trends Report for May 2010, “Through the first three months of 2010, vehicle loans held by CUs declined by 2.6%. Since the expiration of ‘cash for clunkers’, month-only declines have averaged 0.8%. Over the past year, CU vehicle loans have declined 3.7%”.
Over the last very difficult year credit unions using the DILLS™ system have fared better than the national average, but hardly anyone’s numbers are where they were a year ago. As we move into the summer months when demand is usually the highest, everyone seems to be struggling to meet lending goals or falling short of expectations.
What’s the problem? We all know that demand for new car loans dropped dramatically last September when the “Cash for Clunkers” program ended. The captive finance companies responded to that development by offering a variety of subsidized loan products to spur on sales. Sometimes those subsidized deals aren’t all that great for the consumer, but many credit union members are lured away by them in spite of our best efforts. Then, as car sales started to pick up again, the big banks and finance companies came back into the market with rates that seem ridiculously low, and they’re aggressive with their dealer compensation plans as well.
What can we do? What are your thoughts?
See our response and more at www.iltech.us
