It’s been a topsy-turvy year in the banking sector, but the Dealertrack Credit Availability Index for all types of auto loans shows access to auto credit improved again in July.

July marked the second consecutive month of increased access across all channels and lender types, except for captives, which saw a slight decline, reported Cox Automotive.

Despite the improvements, credit access is still more restricted than it was a year ago. Cox data shows the All-Loans Index increased 0.2% to 97.4, the highest reading since March. That illustrates that getting auto credit was less difficult in July than it was in April, May and June. Compared to last year, however, access was still 5.2% tighter in July and 1.8% tighter than it was in February 2020, just before the pandemic.

July saw yield spreads narrow and approval rates increase to improve consumer credit access, Cox Automotive reported. Still, access for consumers was restricted by:

• Longer terms

• A declining subprime share

• Smaller down payments

• A falling negative equity share

Approval rates increased 74 basis points in July but were down one percentage point from the previous year. The subprime share declined to 10.4% from 10.5%, and a year-over-year decrease of 1.1 percentage points, Cox reported.

The percentage of loans with terms longer than 72 months decreased by 0.4 points and was 1.3 points lower than the previous year.

Credit availability improved across all channels. Used-vehicle loans saw the most improvement. But on a year-over-year basis, Cox reported all channels were tighter, with certified pre-owned loans seeing the most tightening.

Credit availability varied among lender types. While auto-focused finance companies eased, captives became more restrictive. Access also varied among lender types on a year-over-year basis. Auto-focused finance companies were the most lenient, while credit unions were the tightest.

The  Dealertrack Auto Credit Index tracks shifts in loan approval rates, subprime share, yield spreads and loan details, including term length, negative equity, and down payments. The index is baselined to January 2019 to illustrate how credit access shifts over time.