Consumer Auto Trends Create Growth Opportunities For Credit Unions
CHANGES IN CONSUMER BEHAVIOR ARE PRESENTING NEW OPPORTUNITIES FOR LENDERS IN THE AUTO FINANCING INDUSTRY. Despite most auto loans still originating from captive lenders – those tied to automakers – many consumers are considering credit unions to finance their vehicles. This presents a chance for credit unions to differentiate themselves as lenders by offering personalized service and better interest rates along with flexible credit standards and repayment terms.
To take advantage of this opportunity while remaining vigilant about risk, credit unions can leverage instant income and employment checks via The Work Number® from Equifax. The Work Number utilizes a database of differentiated and proprietary data that can give credit unions a more holistic view of applicants. Having the capability to instantly and seamlessly verify an applicant’s income and employment can help credit unions navigate risk while enhancing member experience.
“Although there is significant opportunity in the auto lending space, credit unions should be aware of the potential risks and take a proactive approach in addressing potential issues,” said Ryan Coleman, Credit Union Sales Leader at Equifax Workforce Solutions. “Leveraging consumer financial insights and gaining a broader view of a member’s overall financial position can help credit unions confidently attract and keep new members in the form of auto loans.”
While traditional credit reports remain a strong indicator of credit history and past financial reliability, alternative data can help credit unions gain a more robust picture of a potential borrower’s financial history and responsibly expand access to credit to support a more inclusive economy. Alternative data - Fair Credit Reporting Act compliant information not included in traditional credit such as telecommunications, pay TV and utilities payment history - can provide a broader view of consumer behavior to help businesses make better decisions. According to previous Equifax research, leveraging alternative data could shift 8.4 million more U.S. consumers into scorable credit bands.
As credit unions look to responsibly expand their auto-lending portfolios, understanding shifting consumer demographics is also important. The latest Equifax Auto Insights Report for 2025 reveals that Gen Z stands out with 29% of their auto loans coming from credit unions – the highest among all generations. While this presents a valuable growth segment, their shorter credit histories often make them riskier borrowers; in fact, 2.3% of Gen Z loans are overdue, the highest of any age demographic.
By using alternative data, smarter lending tools, and member-focused strategies, credit unions can grow their auto lending portfolios while keeping risk in check and building stronger relationships.
To discover additional auto lending industry trends, check out the latest Equifax Auto Insights for 2025.