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- Auto loan access ticks up in May as lenders ease subprime standards
Auto loan access ticks up in May as lenders ease subprime standards
CDG News Alert (1 min. read)
Anna del Villar
June 12, 2025
Driving the news: Auto loan access improved modestly in May, with the Dealertrack Credit Availability Index rising to 96.7 from 95.5 in April, continuing a gradual upward trend in credit availability.
For context: Approval rates increased by 28 basis points while lenders extended more loans to subprime borrowers, with that cohort rising by 33 basis points.
However, consumers are paying more. Contract rates rose from 11.12% to 11.28% in May.
And the share of loans with terms longer than 72 months increased by 53 basis points as buyers stretch payments to manage monthly costs.
Why it matters: The data suggests lenders are cautiously optimistic, showing "slightly more willing to approve applications, potentially reflecting confidence in borrower creditworthiness or broader economic stability," read the report.
Worth noting: Credit unions and banks led the loosening trend, while auto-focused finance companies remained more conservative. Used vehicle financing saw the most notable improvement compared to new vehicle loans.
What we're watching: Some warning signs are emerging alongside the improved access. The proportion of borrowers with negative equity rose by 34 basis points, signaling potential financial strain or vehicles depreciating faster than loan paydowns.
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