Michigan credit unions are riding high in the auto-lending market with an 8.5-percent increase in new loans in the second quarter, totaling $2.2 billion in auto-loan balances as of June 30, 2009.
This represents a record 32 percent increase in new vehicle loans from June 2008 to June 2009. The record-breaking growth coincides with the launch of the “Invest in America” program in December which offers credit union members discounts on select General Motors and Chrysler products and low-cost financing. The “Invest in America” member discounts are helping the domestic automakers during a critical time when credit is tight and encourages “buy American”.
“More than 200 credit unions statewide have stepped in to fill the void in auto lending,” said David Adams, MCUL CEO. “Credit unions are financially stable, increasing members’ savings deposits and supporting their members and Michigan’s auto companies by making the loans that put new and used cars on the road. The ‘Invest in America’ program has strengthened credit union relationships with auto dealers and shown the importance of buying American. This is not just about market share. It’s about credit unions helping the auto industry, jobs and our economy.”
“Invest in America” has facilitated more than 190,000 new vehicle purchases for GM and Chrysler nationwide since January. The program has resonated with Michigan car buyers as the Detroit automakers work to reestablish market share. By offering a significant discount on a new GM or Chrysler vehicle, the program encourages Michigan’s 4.4 million credit union members to buy American-made products and support local jobs. By offering lower rates than competing lenders, the program prompts members to finance their purchase through their credit union. The average new car loan rate from a credit union is significantly lower, at 5.8 percent, than bank rates at 7.0 percent, according to Datatrac July 2009 data.
New auto loans are not the only bright spot for credit unions. Used car loans increased 14 percent from June 2008 to June 2009 and small business loans grew 17 percent over the same time period. And the momentum continued into the third quarter of 2009, as Michigan credit unions increased their market share of new and used car loans from 23 percent July 31, 2008 to 36 percent July 31, 2009. This is the highest market share increase of the 20 most populous states.
Reflecting the trend in the broader economy, credit union savings deposits grew by 2.5 percent in the second quarter. This represents the strongest growth rate in six years. Overall credit union loans are also on the rise with an increase of 1.6 percent in the second quarter. This represents a 12-month growth rate of 5.8 percent; the highest since 2005.
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment