After months of improvement, the share of auto loans being approved has begun to backslide, according to CNW Marketing Research.
Approval of all loan applications from prime shoppers reached 88.9 percent in June and rose to 91.7 percent in August. But approvals declined in September to 88.4 percent, and continued to drop in the first two weeks of October to 86.2 percent, wrote CNW’s Art Spinella.
Similar patterns of decline were seen in the near prime and subprime categories.
Excluding leases and personal loans, customers being financed through a dealership or financial institution hit a high water mark in August at 84.7 percent for prime and 71.6 percent for near prime, according to Spinella.
Subprime borrowers have seen declines in loan approvals for five consecutive months since June. More than third of the rejections can be traced to consumers who recently entered the market with poorer FICO scores and believed they could get an auto loan. However, the other two-thirds of subprime borrower rejections would have been approved in August.