Credit Unions See The Highest Market Share In Five Years

June 21, 2022 by Melinda Zabritski

Young couple discuss the purchase of a new car with salesman

As the automotive industry continues to navigate through inventory shortages and high consumer demand, we’ve seen captives pull back on offering new vehicle incentives compared to the early stages of the pandemic. This has opened the door for credit unions to regain market share, considering they often offer the lowest interest rates.

According to Experian’s State of the Automotive Finance Market Report: Q1 2022, credit unions had their highest total share in five years—increasing to 22.06% from 18.55% in Q1 2021. This is good news considering credit unions’ market share has seen a continuous decline over the last few years, going from 21.15% in Q1 2018 to 20.21% in Q1 2019 and 19.28% in Q1 2020.

As the ongoing inventory shortages lead to reduced availability for new vehicles, increased demands for used vehicles have become more prominent. And with credit unions typically focusing on the used vehicle market, seeing a significant increase in their market share is not out of the ordinary.

New and used vehicle finance trends

Breaking down vehicle financing market shares further, credit unions’ new vehicle financing market share increased from 10.77% to 15.79% in Q1 2022 and their used financing market share went from 24.45% to 26.48% year-over-year.

While credit unions experienced the most significant growth in Q1 2022, it’s important to look at the trends at a broader level. This quarter, used vehicle financing saw a slight increase—making up 58.98% of all vehicle financing, compared to 57.37% the previous year. Though, new vehicle financing declined in Q1 2022, making up the other 41.02%, from 42.63% over the same period.

As we continue to see how inventory shortages affect the availability for new vehicles, it is notable that the value of used vehicles has been on the rise due to high consumer demand. In Q1 2022, the average monthly payment for used vehicles increased to $503, from $414 the previous year. While the average monthly payment for new vehicles jumped from $577 to $648 year-over-year.

The price increases will reflect in financing attributes as consumers are searching for the most budget-friendly options.

By staying close to the data, it will enable lenders and dealers to make informed decisions when helping consumers find the right vehicle for their needs in the quarters to come.

To learn more about credit unions market share and other automotive finance trends, watch the entire State of the Automotive Finance Market: Q1 2022 presentation on demand.