Car Loan Access Down
January continued three-month streak of tightening across channels.
IMAGE: Pexels/Sora Shimazaki
Automotive credit was harder to get as the year began, tightening in all channels and lender types, according to Cox Automotive analysis.
A string of declines that started in late fall continued to reach the index’s lowest level since August 2020 and making for tighter access than a year earlier.
Multiple conditions combined to make credit harder to come by for consumers: widening yield spreads, and falling term lengths, approval rates and subprime share, Cox said.
The only metric in consumers’ favor in January was an uptick in the negative-equity share. Though flat, the down-payment share was at its highest in the report’s history.
New-vehicle loan access was the tightest for the month.
Loan approval rates were down 1.6 percentage points year-over-year, while the subprime share was up 0.6 percentage points.
DIG DEEPER: Shifting Economy Sends Auto Loan Rates Up
Originally posted on Auto Dealer Today
More Auto Finance
Interest Rates Further Squeeze Auto Consumers
Last month’s hike and a potential second increase this month add to a growing list of inflation woes that could continue to dent overall car sales.
Read More →
Mind Your Process
Consistent steps taken in various aspects of the F&I office can make valuable differences over time, similar to an outline for a best-selling book.
Read More →
Top Five Credit Application Fraud Flags
Compliance audits regularly reveal bad habits that can lead to fraud charges and should have been stamped out decades ago.
Read More →
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 →