Recent trends in the auto lending market have unlocked a unique opportunity for credit unions to help both existing and new members save money on their car loans, especially during periods of financial uncertainty.
Due to rising rates, one might think there is little opportunity to grow in auto refinance. However, interest rate hikes have caused consumers to evaluate their debt for new opportunities to save. By capitalizing on this neglected asset class, credit unions can help both new and existing members lower their monthly payments with auto refinance.
Rising rates and car prices creating more mispriced loans
Rising rates coupled with increased car prices has created an environment for consumers who want to save money on their mispriced loans. The average cost of a used vehicle has increased from $19k to $22k from April 2020 to April 2021, according to Transunion.1 Total auto loan balances also rose a percent from Q1 2019 to Q1 2021.
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