As Depreciation Protection client growth continues, credit union members are receiving more coverage and confidence from their auto-lending credit union partners. According to Experian data, in 2020 the total balance of consumer auto loans grew to a record high $1.37 trillion. In an average month, with Americans taking out nearly 2.3 million in new auto loans ($51 billion in value) and 64% of refinanced auto loans with credit unions, the need for member asset protection is substantial.
Depreciation Protection announced today that seven new credit unions, ranging from New Hampshire to Alabama, have joined the client family and extended Depreciation Protection to their members. Further, two auto dealerships added Depreciation Protection coverage, providing more access and better rates for members shopping for new cars. Nationally, over 300 financial institutions use Depreciation Protection Waiver (DPW) coverage which protects members from the negative financial impact of auto accidents that result in a total loss. DPW cancels remaining auto loan debt up to the waiver benefit limit, after deducting the remaining auto value.
As of the end of June 2021, Depreciation Protection’s new clients are:
- Merck, Sharpe & Dohme Federal Credit Union—Chalfont, Pennsylvania
- MidSouth Community Federal Credit Union—Macon, Georgia
- Alabama State Employees Credit Union—Montgomery, Alabama
- Enbright Credit Union—Nashville, Tennessee
- New Hampshire Federal Credit Union—Concord, New Hampshire
- Infinity Credit Union—Westbrook, Maine
- McKay’s Family Dodge—Waite Park, Minnesota
- Koronis Motor Group, dba Paynesville Chevrolet—Paynesville, Minnesota
In many ways, the auto industry is seeing a return to pre-pandemic activity levels. For example, vehicle miles traveled for March 2021 surpassed 300 million for the first time since the summer of 2019.
Consumer confidence is also improving, jumping 21.3% in March 2021. Plans to purchase a vehicle reached a 13-month high. With sales of new vehicles increasing 59.7% year-over-year, even with 37% less new inventory and pre-owned at a 117% increase year-over-year, there’s no question that the consumer demand is there and member protection needs are rising.
Launched in 2016, DPW is the first waiver product to protect consumers from the impact of depreciation and loss of equity. Last year proved to be a record-setting year, and 2021 continues the pace of record growth. Experian FICO scores indicate that those with scores in the “good” and “very good” ranges—those who are considered prime borrowers—experienced the biggest changes in auto debt in 2020. Noting that Americans younger than 45 take out more auto loan debt than any other age group, auto lending and protecting that member auto equity presents a strategic business opportunity for credit unions.
Brian Allietta, Depreciation Protection president and CEO, notes, “Auto lending continues to fuel asset growth at credit unions, and when a member secures the loan, having the confidence that Depreciation Protection will protect one of their largest assets provides the member comfort and financial stability. As more credit unions explore ways to offer additional protections to members and help create added member comfort and confidence in auto borrowing, we continue to rise to the top as an expert value-added partner. Our technology platform, claims payment history, and ease of doing business drive opportunity for them.”