Auto Loan Access Keeps Falling
July conditions tighter for consumers despite average loan rate decline.
The reduced credit access came in all channels and lender types.
Pexels/Pixabay
Auto loans were harder to get for the fourth month in a row as approval rates declined and other measures made credit more challenging to come by in July.
Though the average loan rate fell by seven basis points for an 80-point decline since February, loan approval rates declined four percentage points year-over-year, according to Cox Automotive.
In addition to continued reduced approval rates, Cox blamed decreased subprime share and increased yield spreads.
The reduced credit access came in all channels and lender types, according to its report, which put Cox’s All-Loans Index down 1% to 92.9, or about a 2% year-over-year drop.
Loans with negative equity increased slightly for the month, actually helping credit availability. Term lengths, the percentage of down payments, and loans with terms longer than 72 months were flat, though the down payment percentage was up by 30 basis points year-over-year.
LEARN MORE: Is the Death Knell Being Sounded for Dealer Financing?
.
Originally posted on Auto Dealer Today
More Auto Finance
More Auto Loans for the Taking in August
Riskier categories were on the uptick for the month as lenders loosened access in several areas while balancing out the exposure in another, Cox Automotive reported.
Read More →
July Was Hot for Auto Borrowers
Credit proved readily available for many, but most loans left buyers in negative territory, Cox Automotive said.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Auto Refi Savings Surge
Consumers with 84-month auto loan terms who refinanced saved the most on monthly payments, according to a new report by auto refinancing provider Caribou.
Read More →
Subaru Enters Lending Business
The automaker follows other brands in adding captive financing in the U.S., and says the move will strengthen its position here.
Read More →
Positive Equity Reaches Record High
Mainstream vehicle owners who bought a car seven years ago are likely to have positive equity when trading in for a new vehicle, according to second-quarter Edmunds data.
Read More →
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →