Car prices are going up—with average cost of a new vehicle reaching $37,000 in 2019, according to Kelly Blue Book. In response, consumers are buying more used cars. They’re also holding onto their cars longer—on average 11.4 years, according to R.L Polk—before buying another. And they’re looking for loan options that create monthly payments they can afford, plus easy applications.
According to data from Equifax, Atlanta, “the number of loans originated is relatively stable, yet loan balances continue to increase,” notes Jenn Reid, VP/automotive marketing and strategy. “This is slightly different from leases, which are showing a falling number of lease originations but a more moderate rise in balances issued.
“These numbers indicate that the automotive market in financing originations has been stable while the amount financed has increased throughout 2019 heading into the final months of the year. The rising balances are most likely a result of a stronger shift to trucks/SUVs when shopping.”
In all, car loan growth for CUs in this environment has been moderate. At this writing, Callahan and Associates’ Trendwatch Report shows modest growth in Q3 2019 of 2.3% for new vehicles and 12.5% for used. The report also confirms a slowdown in overall auto finance market share for CUs, down 2%.
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