Evidence of the Cash for Clunkers (C4C) program’s impact on consumer credit were revealed in the Federal Reserve’s August report, which showed marked declines in loan-to-value ratios and the amount financed.

The loan-to-value ratio, which hovered around 91 and 92 percent in June and July, respectively, fell to 86 percent during the reporting period – the lowest point since the fourth quarter 2008.

The C4C rebate program’s impact was also evident in the amount financed, as consumers required $4,461 less in vehicle financing ($24,405) than in July ($28,866). This was the lowest level for amount financed since the fourth quarter 2008

Additionally, interest rates increased from 3.43 percent in July to 4.06 in August. Loan lengths decreased slightly from 62.7 in June and July to 61.8 percent in August.

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