CUs Gain Car Loan Market Share Posted by Association of Vermont Credit Unions on 11:16 AM

Credit unions have gained vehicle loan market share while the average credit scores from consumers purchasing vehicles have dropped to near pre-recession levels, according to Experian Automotive's quarterly automotive credit analysis. Credit unions grew their market share by 10.85%, to 16.89%, during the first quarter,  according to Experian.

Overall, the auto lending environment appears to be on the rebound, according to Experian. The average credit score for financing a new vehicle dropped six points to 760 and dropped four points to 659 for used vehicles. Comparatively, credit scores in the first quarter of 2008 were at an average of 753 for new vehicles and 653 for used.

Credit unions' increased market share could be explained in part by their ability to set lower terms. Lenders overall continued to set favorable terms for consumers during the first quarter, said Experian. Interest rates were lower year-over-year and loan terms were longer, giving consumers access to potentially lower monthly payments. For example, the average interest rates dropped to 4.56% on new vehicle loans and to 9.02% for used. The average loan terms also increased, extending by one month for new and used vehicles to a total of 64 and 59 months, respectively.