Driving the news: Auto loan credit access improved for the third straight month in July, with approval rates jumping to 74.4% and average interest rates dropping to 10.87%.
For context: Cox Automotive’s Dealertrack Credit Availability Index rose to 98.1, continuing a trend of looser lending that started in late summer 2024.
The share of subprime borrowers fell to 13.6%.
Average down payments hit their lowest level since November 2022.
And the number of borrowers with negative equity fell (although still historically elevated).
Why it matters: The combination of higher approval rates and lower interest rates makes cars more affordable for consumers at a time when the auto industry needs a sales boost. Lenders appear confident enough to compete aggressively for loan volume while still being selective about credit quality.
Bottom line: Auto financing is clearly getting easier for consumers, with better approval odds and cheaper borrowing costs across most dealership channels. The trend suggests lenders are optimistic about the market despite ongoing economic uncertainties that briefly tightened credit earlier this year.
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