Despite the COVID-19 pandemic, auto loan growth is making a comeback. In a recent Callahan and Associates analysis reported in Credit Union Times, compared with the third quarter of 2019, total auto lending grew 1.2%, or $4.5 billion, to $382.7 billion outstanding. As the economy reopened in the third quarter of 2020, growth has begun to rebound, but further challenges for carmakers might make this growth difficult, such as the recent global semiconductor shortage.
Another encouraging sign for credit unions’ auto loan portfolios is the improving delinquency numbers. Year-over-year delinquency fell 14 basis points to 0.44% as of September 2020. Much of this comes from consumers choosing to use their federal stimulus payments and other financial assistance to pay down debt.
Going forward, auto loans will continue to be a strong part of credit unions’ portfolios, even if the overall strength isn’t immediately obvious. If your credit union is looking to grow loans even more, the Loan Lead Generator can help you reach out to potential borrowers through your website and Facebook page! Click here to learn more and schedule a demo!