SAN DIEGO—Credit unions are generally more optimistic about their auto finance portfolios than they were nine months ago, with the majority having seen an increase in auto financing compared to last year, according to a new survey from Credit Union Leasing of America (CULA).
Nevertheless, the vast majority (85%) expect that President Trump's tariffs will mean consumers delay vehicle purchases, with 65% of respondents anticipating that the tariffs will drive a decrease in vehicle sales—but increasing leasing activity.
Only 21% expect Trump to soften his stance on tariffs and that the market will stabilize. The survey was conducted among credit union professionals in late June through early August of 2025, CULA said.
Reflecting sentiment in CULA's recent consumer survey that showed affordability was the key factor in consumers' leasing vehicles, the majority of credit union professionals expect vehicle prices to increase over the next 12 months and that affordability will, indeed, lead more consumers to opt for vehicle leases over loans, with 75% of respondents expecting consumers to choose leasing over loans over the next six months.
Rising prices on consumer goods, that are leading to a rise in cost of living, was at the top of the list of macroeconomic drivers expected to increase vehicle leasing. Echoing this, Experian reported that vehicle leasing increased from 23.71% in Q1 2024 to 24.69% in Q1 2025, CULA noted.
"While credit unions' positive outlook has increased, these survey results reveal that they also have concerns about the impact of tariffs on vehicle sales, as well as an expectation that vehicle prices will rise, creating affordability issues that, they expect, will drive more consumers to choose a vehicle lease in the next six months," said Ken Sopp, president of CULA. "This leasing increase is also reflected in the growth we are seeing in our business at CULA, as we help more credit unions offer their members the lower monthly payments and term flexibility vehicle leasing provides."
Scot Hall, EVP at Swapalease.com, agreed with the findings.
“Certainly, higher prices make leasing a more attractive option,” Hall told CUToday.info. “It’s also worthwhile to point out that car market uncertainty and unknowns also favor leasing due to less commitment and future values being a problem of the leasing companies as opposed to the consumer.”
Auto Finance Sentiment
In spite of concerns about tariffs and rising vehicle prices, credit union professionals' sentiment about auto finance is more positive than it was nine months ago, with 77% of respondents reporting that they are somewhat (58%), or very (19%), optimistic about the auto finance landscape through the end of 2025, versus only 57% who were somewhat or very optimistic in the third quarter of 2024.
Meanwhile, 84% surveyed expect their auto finance portfolios to grow (53%) or remain the same (31%) over the next six months, with only 16% expecting a decline.
“This could be because the majority of those surveyed have seen an increase in auto financing year-to-date compared to last year,” CULA said.
Of the 23% who are not optimistic, tariffs were the number one reason cited, with delinquencies, continuing inflation, and high interest rates scoring nearly as highly. In addition to the 71% of credit union respondents expecting an increase in vehicle prices as the vehicle market plays out over the next 12 months, 49% expect that credit standards will tighten, 42% expect that vehicle inventory will continue to decrease, while only 21% expect interest rate increases.
"The optimism expressed about their auto finance future by the majority of credit unions surveyed, even in the face of some market headwinds, is encouraging – and typical of credit unions. After all, credit unions prioritize helping their members with financing options in good times and bad," said Chris Harper, director of business development for CULA. "Their expectation that their portfolios will grow in the next six months aligns with what we are seeing; and, as we partner with credit unions to help more of their members into vehicle leases, we are delighted to support that growth."