A $750 monthly car payment. Let that sink in. That used to be a mortgage.
Bob Child, Chief Operating Officer at Origence, the largest auto lending platform for credit unions in the U.S., sat down with Sarah Snell Cooke of The Credit Union Connection at GAC 2026 to break down what’s actually happening in auto lending right now and where the real opportunities are hiding. Spoiler: there are more of them than you might think.
Start with the headline numbers. Origence processed $62 billion in auto loans for credit unions in 2025, a 17% jump over the prior year. So yes, things slowed heading into 2026, but Child is not hitting the panic button. He points to pent-up demand, larger-than-usual tax refunds, and two projected Fed rate cuts as the fuel that keeps the engine running through year end.
New cars are a tougher story. With average prices north of $50,000 and manufacturers ready to roll out 0% financing the moment sales dip, it gets hard for credit unions to compete on that turf. But used cars, and especially the wave of off-lease EVs about to flood the market at depreciated prices, are shaping up to be a genuine sweet spot. Around 300,000 EVs are coming off lease in 2026, and for members who want an EV without the new car sticker shock, that is a compelling pitch.
Child also digs into something that does not get enough airtime: auto insurance. Rates have spiked 77%, and he makes a pretty compelling case that lenders need to start folding insurance costs into their underwriting calculus the same way they think about a mortgage payment. It is a little uncomfortable as a concept, but hard to argue with the math. The conversation also covers delinquency trends, the growing problem of negative equity as loan terms stretch to 8 and 9 years, and the K-shaped economy putting real pressure on lower-income borrowers.
Then there is the rate cut timing issue, and this one stings a little. Big banks routinely cut their auto loan rates ahead of a Fed move, locking in market share early. Credit unions tend to wait for the official signal. Child is direct about what that pattern costs. If your credit union is still doing it that way, this part of the conversation is worth a listen.
NOTE: The AI responsible for this masterpiece should probably stay in its lane—which, based on this output, is not transcription.
Sarah Cooke
Hello everyone. I’m Sarah Snell Cooke with The Credit Union Connection. We’re coming to you live from the Governmental Affairs conference 2026 joined by Bob child, today, welcome. Thank you for having me. Absolutely. Bob is with Origence, correct, and we’re going to talk auto lending. If you want to do a quick little intro of yourself in the company
Bob Child
Bob Child, Chief Operating Officer with Origence. We are the largest auto lending platform for credit unions in the US.
Sarah Cooke
And so with that, obviously auto lending been kind of down lately, little slow, and that’s credit unions bread and butter. So talk to us a little about where you see it going.
Bob Child
So let me just take a step back and reflect on 2025 so 2025 Origence processed $62 billion worth of auto loans on behalf of credit unions. That was a 17% increase compared to 2024 so credit unions got a little bit more back into the game in 2025 now, you were 100% correct when you said auto lending was down in 2026 January, positively was down. Now, with that said, there was a little bit of cold weather and snow between the Midwest and the East Coast, in South Carolina, so, yeah, in the month of January. So we started to see it come back in February. So February was picking up, and I think there’s going to be a bunch of pent up demand, which comes in in March. Now, the other thing that’s going to happen starting March and April is apparently I’m hearing rumors that tax refunds are going to be higher this year than in years past. Again, I’m not sure who’s getting those, because clearly I’m not getting one of those, but apparently there’s a lot of people that will be getting a larger tax refund. We think that that will spur increased auto lending for the months of March and April. Then we’re going to see that lull again. Then. So now the projections come in. Now we look at it and go, Okay, so what is the rest of the year look to shape up? Like all of the analysts that we’re hearing are predicting two rate cuts in 2026 if that happens, that will spur another round in the second half of 2026 for auto lending. Now, with that said, also new car sales, new car sales, I still think, will be down about 3% three to 5% in 2026 a bunch of challenges there. One is car prices are going up. The average car price is now over $50,000 the average monthly payment on a new car is now close to $750 I mean, that used to be a mortgage payment, right? So it’s crazy to think about that it’s out there. So from an affordability perspective, and we think about all this news about the K shaped economy and everything, I think that new car sales are going to struggle, and when that starts to struggle, what happens is the manufacturers turn to their captive finance companies, and they’re going to say to the captive finance companies, we need that 0% financing or that 2.99% financing. And once that starts to happen, it’s really hard for a credit union to come. Heat against 0% or 2.99 so put aside the new car opportunity. Then you look over to the certified pre owned and the used cars. Here’s a great one, just on EVs alone. Whether or not you like EVs or not, there’s going to be 300,000 EVs that are going to come off lease in 2026 and they’re going to be at low cost prices because of the depreciation that EVs. See, there will be a strong resurgence of interest in these used EVs because of the price that’s out there. And I think it’s a great opportunity for credit unions that are there. In addition, people that are saying that the new cars are too expensive will look to the one to three year old cars in the U side. And again, this is the sweet spot for credit unions.
Sarah Cooke
You’re mentioning, you know, used EVs, the batteries life is pretty limited at this point. So as you mentioned, they’re going to be depreciated. Is that? Do you think that’s still, though, going to be a market for credit unions, because generally used cars are credit unions.
Bob Child
Absolutely, I definitely do. I definitely see that as a market opportunity that’s out there.
Sarah Cooke
Yeah, and again, you talked about affordability.
Bob Child
Affordability is a challenge.
Sarah Cooke
At some point, something has to happen or either craniums won’t be able to lend because the loan to value or the or not, the loan to value, excuse me, debt to income is going to be out of this world. I mean, I, I don’t buy new cars anymore because of that. Got a few years old Mercedes.
Bob Child
But you know, like, well, you know, I remember when a five year loan was unheard of. Now it’s 8 to 9, and so I think we’re going to start to see the loan length go even longer in order to support a monthly payment, which is interesting.
Sarah Cooke
I was gonna say there must be risk involved with that.
Bob Child
There definitely is risk, because you run into negative equity. That’s that is a big problem in our industry right now, is the amount of people that are rolling last cars payment into this car, and so that creates a lot of challenges out there. The other challenge, which you know we’re talking to credit unions about, is auto insurance. So auto insurance rates have spiked 77% over.
Sarah Cooke
I remember that this year.
Bob Child
And so, I mean, it’s gotten to the point that, you know, you mentioned debt to equity ratios and things of that nature, that as a lender, you almost have to start to take that into account. What will your new car insurance payment be on top of your monthly car payment? And almost think of them together, because then, like, a mortgage, yeah? Mortgage, yeah. So it’s a scary thing that’s happening. At some point they’re going to have to regulate this insurance market better.
Sarah Cooke
So for sure, yeah, federal charter.
Bob Child
Well, I think a big chunk of it is, well, now you’ve got increased parts prices because of tariffs, so that factors into the insurance, and then you’ve got all of these plaintiff attorneys that are suing for dollars, which is driving it Up to Yeah, yeah. It’s a challenging market, but it still is a great opportunity. With some of the best yields for credit unions, it’s out there, and right now, the margins are the widest on auto lending that they’ve been in five years. So again, a great spot for credit unions to come back into that liquidity remains a little bit tight in some credit unions, but we’re starting to see it free up.
Bob Child
Let’s talk delinquency for a second, delinquency. But it’s starting to come down. So we saw this little spike in delinquency, but it’s starting to tail back into a little bit more normalcy. But we do hear from credit unions about the concern and delinquency, and again. So it’s, it’s that K shaped economy segment that some of the lower incomes are struggling with the increased inflation, right? So the price of milk and eggs and so no matter what Trump said in the State of the Union, it is more expensive for consumers out there today, and so disposable income is shrinking. More and more. Our health insurance went up 25% health insurance another thing, absolutely, it’s just squeezing that disposable income.
Sarah Cooke
And I think the other thing I was going to ask about too is the non interest opportunities around it as well credit unions, I think you know, they are so interest sensitive, interest rate sensitive, and which is, you know, they’re in the business making loans. They should be right. But also, you know, there’s all these packages around them that we need to get better, maybe at selling for interest income. There’s a great opportunity there, too. I think, I don’t know what your thoughts are.
Bob Child
Oh, I totally agree. I totally agree. I think that there is that opportunity for aftermarket products and other add on solutions that can provide income for credit unions.
Sarah Cooke
And so, I think we’ve seen interest rates on used cars. Are they doing any better than new?
Bob Child
Yes, they’re coming down. Yeah. So, yeah, so. And this is thing that I also remind credit unions, is that the big banks, when interest rates are declining, the big banks, will reduce their rates ahead of a Fed reduction. So if they have confidence that a Fed is going to make a rate reduction in the upcoming quarter, they will start to reduce their pricing on interest rates early, recognizing it’s going to be a five year, seven year loan. So they tend to get more market share early versus credit unions will wait until the Fed reduces the interest rate before they will reduce their interest rate. So credit unions tend to lose market share if they don’t, that’s a great point. Build that into the pricing conversely, as we saw in 2021 when interest rates were going up, the big banks slowed their lending, started increasing rates, and the credit unions were slow to increase rates, and we got a flood of business. Probably didn’t want all that business, but we got a flood of business.
Sarah Cooke
So people need cars, and you sure buy one for cash anymore, right?
Bob Child
Just gotta price it appropriate.
Sarah Cooke
So what would you like to leave our credit annoyance with today?
Bob Child
That you know we at Origence, are very bullish on 2026 and particularly around used cars, we do say price and underwrite smartly. You know, be careful of the economics that are out there, and also think about the insurance component as part of your underwriting metrics, as a new thing going forward that is so interesting.
Sarah Cooke
Thank you so much for your time. Thank you. Thank you appreciate it.