NEW YORK CITY (1/20/16)--Forbes picked up on last week’s report of historic new-auto loan balances and tapped a CUNA Mutual Group expert for comment.
The credit union industry’s more than $100 billion in new-auto loans, $164.3 billion in used-vehicle loans and membership growth of 4.3% all were highlighted in the article “Credit Unions Gain Share In Auto Loans; It Pays To Shop Around.”
“It’s mainly due to rates,” Steve Rick, CUNA Mutual Group chief economist, told Forbes.
On average, credit unions beat banks’ standard rates by roughly 1.25 percentage points, he said, adding, “We’re basically beating them on loan pricing.”
Shopping around for auto financing does pay off, Forbes noted. “Besides the interest rate, auto loans have a lot of moving parts, such as the negotiated price of the vehicle, the size of the down payment, the term or length of the loan, and how much you get for your trade-in. All those factors can mean the best deal might not necessarily have the lowest interest rate,” it said.
Captive financing from auto manufacturers may be enticing with zero-percent rates, but credit unions compete by offering low standard rates and extended-term loans, Forbes noted.