Worcester Business Journal

14 Worcester Business Journal • September 14, 2015 www.wbjournal.com B A N K I N G & F I N A N C E << Belchertown • Brimfield • Charlton • Leicester • Ludlow • Palmer • Paxton • Ware • West Brookfield • Wilbraham Your Company Deserves Moore Meet Bryan Moore: Our Small Business Banking Expert If you are searching for world-class business banking solutions that come with personal guidance and proven strategies, look no further than Country Bank's Bryan Moore. He'll put his years of expertise to work for your business and connect you with financial tools designed to help your company grow. MEMBER FDIC MEMBER DIF countrybank.com • 800.322.8233 • T hrough the long, hard years of the Great Recession, replacing an old car looked to a lot of people like an untenable extravagance. But today, the market has rebounded. "People that, a few years ago, were potentially sort of trying to make that vehicle last are feeling a little better," said Debbie Taverna, vice president of consumer lending for Marlborough- based Digital Federal Credit Union. With growing car sales has come a greater need for financing. In the sec- ond quarter of 2015, lenders originated $119 billion in U.S. auto loans, the highest quarterly total in 10 years, according to the Federal Reserve Bank of New York. Credit unions are taking an increas- ingly large piece of the growing market. In the first quarter of 2015, credit unions provided almost 17 percent of auto loans in the U.S., and their share of the market grew 7.6 percent year over year, according to credit information services provider Experian. Banks — mainly huge national brands — gave out 34 percent of car loans, while 28 percent were "captive" finance, provid- ed by financial subsidiaries of car com- panies, such as Ford Motor Credit. Taverna said DCU, the largest credit union in Central Massachusetts, made $1.3 billion in loans for 72,000 vehicles last year. This year, it's on pace to finance 80,000 vehicles. Car loans are also a big deal for smaller credit unions. Fitchburg-based IC Federal Credit Union did about $100 million in auto-lending business last year, according to Bruce Mathieu, senior vice president for retail and con- sumer lending. Mathieu said part of IC's success comes from its relationships with local car dealers. He said the credit union can offer same-day funding in a market where some lenders take several days. Communication with the dealers is a big deal too, he said. "We don't have voice mail," he said. "We answer every phone call." Credit unions are especially likely to be the ones financing used car sales, according to the Experian numbers, and Taverna and Mathieu both said Credit unions grab larger share of auto loan business BY LIVIA GERSHON Special to the Worcester Business Journal Who loans money for automobile purchases? Although credit unions are writing more car loans, banks still lend twice as much nationally. Source: Experian Banks Captive (tied to automakers) Credit unions Finance companies "Buy here, pay here" 35% 50% 10% 5% 35% 7% 22% 23% 13% New car loan (market share, Q2 2015) Used car loan (market share, Q2 2015)

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