#3236: CULA Report Shows Over-extension on Used Car Loans Big Concern for Credit Unions...

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Credit Union Leasing of America (CULA) VP, Business Development Mark Chandler joined us on the show to share findings from their Q2 2023 Credit Union Used Vehicle Loan Snapshot.

Right off the top, Mark discussed the over-extension on used vehicle loans being the number one concern for credit unions in the 2023 auto finance landscape, but long-term loans still proliferate with 125% LTV.

In addition, he talked about one of the takeaways that stood out: the 70% of the credit union respondents saying their longest-term loans for used cars are 72 months or more -- and the majority will lend $75,000 or more on a used vehicle.

Mark also addressed how credit unions will continue to incur unnecessary risk if they don’t find an alternative to the long-term used auto loan.

Other findings include:

• 64% of credit union respondents cited over-extension on used loans as their biggest concern about the 2023 auto finance landscape, followed by skyrocketing vehicle prices.
• Auto finance customers today, say respondents, are almost evenly split in interest between long-term (52%) and short term (48%) loans.
• At least one-in-four used vehicle loans are 72 to 84 months for the vast majority (78%) of credit union respondents.
• 72% of credit union respondents say their longest-term loans are 72 months or more, with 28% saying that 84-month loans are their longest term.
• Of those credit unions reporting that 84 months are their longest-term loans, 55% say those make up one in five or more of their loans, with nearly a third saying that they make up over 40% of loans.
• 58% of credit union respondents require a 10% or less down payment on used vehicle loans.
• 55% of credit union respondents say they will extend LTV on used vehicle loans by 125% or more.
• 76% of credit union respondents have a mileage limit on their used vehicles of 75,000 miles or more, with 30% extending that limit to 100,000 miles or more.
• 71% of credit union respondents will lend $75K or more on a used vehicle, with nearly one-third (31%) saying they would lend $100,000 or more.

Check it out and let us know your thoughts. And be sure to watch the entire episode with Mark below for all the details.