The ability to secure auto credit continues to improve for consumers month over month—as some lenders loosen their standards.
The details: According to Cox Automotive’s Dealertrack Credit Availability Index, credit access ticked up in June—marking the second consecutive month that the conditions improved to secure a loan.
The All-Loans Index rose to 97.3, up from 96.5 in May, marking a 0.8-point increase month over month for credit access.
It’s part of a broader run of loosening credit that started in late Summer 2024—with an interruption in April, likely due to the tariff announcements, noted Cox.
Why it matters: When lenders start approving more subprime borrowers and accepting lower down payments, it typically signals either genuine economic optimism or competitive pressure that forces risk-taking.
By the numbers: Year-over-year, credit access was looser across all channels and most lender types—with loans for non-captive new and franchise used vehicles improving the most and captives dipping slightly.
Auto loan approval rates increased by 70 basis points (BPs) in June.
The share of loans with terms greater than 72 months increased by 80 BPs.
Down payment percentages declined by 40 BPs on average.
The share of borrowers with negative equity held steady at 54.8%—sustaining the highest level recorded.
Bottom line: If lenders want to maintain loan volumes while vehicle prices stay elevated, the easiest step is to find ways to qualify more borrowers. And while this approach may boost short-term sales, it could build a foundation of financially stressed borrowers who will be vulnerable to any economic downturn or unexpected expense.
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