CUNA report: Auto inventory, sales rate drops to historic low of 0.5%
WASHINGTON, DC (December 1, 2021) — CUNA Senior Economist Dawit Kebede, PhD released his outlook on the auto lending market, focusing on credit union loan originations. A few key takeaways include:
- The auto inventory/sales ratio dropped down to 0.5% in September, the lowest rate since data became available in 1993. Early estimates reveal that the global auto industry is expected to lose $210 billion in 2021. This decline is due to computer chip and labor shortages, port backlogs, and transportation costs.
- Used cars are not depreciating in value during the pandemic. In 2021, used car value has increased by 30%. This increase in used car value is caused by supply chain issues in new auto production and delivery, and growing competition to local dealerships from online marketplaces such as Carvana.
- In 2020, credit union auto loan growth came in at 1.3%, a decrease from the 2019 growth rate of 2.5%, due to the economic downturn brought on by the pandemic. Before 2019, credit unions enjoyed six consecutive years of double-digit loan growth.
“A negative loan growth rate for new cars is not uncommon during a period of economic downturn. In early 2020, over 20 million people lost their jobs, creating a significant decline in consumer spending, and consequently, in loan originations. This year we saw an upward trend, but we ran into another problem—supply shortages.” – Dawit Kebede
A summary of Dawit’s analysis can be found here.
About CUNA
Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 135 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit cuna.org. To find your nearest credit union, visit YourMoneyFurther.com.
