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Car loan penetration stalling at US credit unions

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Car loan penetration stalling at US credit unions

After years of steady increases, auto loan penetration at U.S. credit unions almost stalled out in the third quarter, but credit card uptake continued to rise.

Vehicle loan penetration, or the number of vehicle loans as a percentage of total credit union members, was 21.3% at the end of the third quarter, up only 1 basis point from June 30, but up 21 basis points from the year-ago quarter. Vehicle loan penetration rose steadily from just under 17% at the end of 2013 to 21.06% in the third quarter of 2018 but has changed little since.

Meanwhile, credit card penetration at Sept. 30 was 17.6%, an increase of 5 basis points from the linked quarter and 18 basis points from the year-ago quarter.

Larger credit unions, or those with more than $3 billion in assets, had the highest median vehicle loan and credit card penetration at 22.1% and 20.1%, respectively, at Sept. 30.

Twelve of the 20 largest U.S. credit unions by vehicle loans reported quarter-over-quarter decreases in used-vehicle loan penetration, while 15 reported declines in new-vehicle loan penetration.

The nation's largest credit union by total vehicle loans, Vienna, Va.-based Navy FCU, reported a 5-basis-point quarter-over-quarter decline in used-vehicle loan penetration, while new-vehicle loan penetration dropped 8 basis points.

Sandy, Utah-based Mountain America FCU and Melbourne, Fla.-based Space Coast CU had the largest quarter-over-quarter jumps in used-vehicle loan penetration among the top lenders at 25 basis points each to 19.3% and 15.1%, respectively. On the other hand, Marlborough, Mass.-based Digital FCU saw its used-vehicle loan penetration fall by 62 basis points in the quarter to 22.3%.

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