Driving the news: Auto lending credit availability resumed its upward trend in September after a brief August pause, with the Dealertrack Credit Availability Index climbing to 98.1 from 97.9, according to Cox Automotive.
By the numbers: Approval rates held steady at 74.4%, but the composition of who's getting financed is shifting.
Subprime share jumped to 14.2% (up 170 basis points year-over-year) while loans exceeding 72 months hit 26.8%, up 200 basis points from last year.
Average used auto loan rates climbed to 14.20%, and new loan rates reached 9.45%.
Banks led the loosening with credit availability up 1.6%, followed by auto-focused finance companies at 0.9% and credit unions at 0.4%. Captives moved the opposite direction, tightening 0.9%.
Bottom line: Looser credit conditions, particularly in used and CPO segments, are creating opportunities for franchise dealers to boost sales, especially among subprime buyers. However, rising rates, longer loan terms, and negative equity require careful deal structuring and risk management.
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