The Hidden Risks of the Auto Lending Boom

The Hidden Risks of the Auto Lending Boom

June 30, 2018

1

The Hidden Risks of the Auto Lending Boom

Share of Wallet Research Series

June 30, 2018

2 CUNA Mutual Group Proprietary | Reproduction, Adaptation or Distribution Prohibited | CUNA Mutual Group ? 2018, All Rights Reserved.

1

Agenda

Section 1

What Are The Hidden Risks Of The Auto Lending Boom?

Section 2

What Do We Know About These Risks?

Section 3

How Can Be Done To Counter These Risks?

3

1 What Are the Hidden Risks of the Auto Lending Boom?

4

2

Auto Sales Have Been on a Tear in Recent Years

Source: CNNMoney, New York Times, Reuters and USA Today 5

Auto Loan Balances Are at a Record High

$ Billions

1200 1000

800 600 400 200

0

$719B 2012

U.S. Total Outstanding Auto Loan Balances

$987B

$1,072B

$1,129B

$800B

$886B

2013

2014

2015

2016

2017

2012-2017 CAGR:

9.4%

Source: Experian's State of the Automotive Finance Market ? Q4 2017 6

3

$ Billions

Credit Union Loan Growth Is Among the Fastest

1200 1000

800 600 400 200

0

$719B

U.S. Total Outstanding Auto Loan Balances

$800B

$886B

$987B

$1,072B

$1,129B

2012

2013

2014

2015

2016

2017

2012-2017 CAGR Finance Co.: 14.5% Credit Union: 14.8% Captive Auto: 4.3% All Banks: 7.5%

Source: Experian's State of the Automotive Finance Market ? Q4 2017 7

Indirect Channel Is Driving Credit Union Auto Lending Growth

CU Indirect Loans

CAGR:

20.1%

300

250

$ Billions

CU Direct Loans CAGR:

200

8.7%

150

100

CU Total Auto Loans

50

CAGR:

14.8%

0

Total CU Outstanding Auto Loan Growth: 2012-2017

Forecast

Source: CUNA Mutual Group ? Economics; Experian 8

4

Indirect Share of Credit Union Auto Lending Continues to Increase

CU Indirect Share of Total Auto Loans Outstanding

70%

Forecast

60%

50%

40%

30%

20%

10%

0%

2012: 43%

2017: 56% 2021: 61%*

*Forecasted growth

Source: CUNA Mutual Group ? Economics 9

Share of Wallet Research Uncovers Hidden Risks

10

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download