Auto Credit Access Improves Again in June as Some Lenders Loosen Standards

In June 2025, the Dealertrack Credit Availability Index continued its upward trend, reflecting a second consecutive month of improved credit access. The All-Loans Index rose to 97.3, up from 96.5 in May, marking a 0.8-point increase month over month. This extends the broader run of loosening credit conditions that began in late summer 2024. The only notable interruption in this trend was in April, likely driven by market uncertainty following tariff announcements, which temporarily tightened access.

Dealertrack Credit Availability Index

Auto loan access was up in June and up year over year

All Auto Loans Index (Jan 2019 = 100)

Key Metrics

1. Approval Rates: The approval rate for auto loans increased by 70 basis points (BPs) in June. This notable rise suggests lenders were more willing to approve applications, potentially reflecting increased confidence in borrower profiles or competitive market dynamics.
2. Subprime Share: The share of loans extended to subprime borrowers rose by 10 BPs, indicating a slight but continued loosening of credit standards for higher-risk consumers.
3. Yield Spread: The yield spread remained relatively stable, increasing just 1 BP from 7.26 in May to 7.27 in June. This was driven by a slight decline in the average contract rate (from 11.28% to 11.23%) and a modest drop in the 5-year Treasury yield (from 4.02% to 3.96%), suggesting that lenders maintained pricing discipline while benefiting from easing rate pressure.
4. Loan Term Length: The share of loans with terms greater than 72 months increased by 80 BPs, continuing the trend of consumers opting for longer terms to manage monthly payments.
5. Negative Equity Share: The share of borrowers with negative equity held steady at 54.8% in June, maintaining the highest level recorded in the dataset after several months of increases.
6. Down Payment Percentage: The average down payment percentage declined by 40 BPs, possibly reflecting increased consumer demand or greater lender flexibility.

Channel and Lender Trends

• Channels: Credit access improved across all sales channels in June. The largest gains were seen in the independent used segment, followed by all used and all new. Only certified pre-owned (CPO) saw a slight decline, which could be driven by tight supply.
• Lender Types: Lender performance was mixed. Auto-focused finance companies showed the most significant loosening, followed by captives. In contrast, banks and credit unions tightened slightly, possibly reflecting more conservative underwriting or portfolio adjustments.

Year-Over-Year Comparison

Compared to June 2024, credit access was looser across all channels and most lender types:

• Lender Types: Banks and auto-focused finance companies led the year-over-year loosening, while credit unions also improved. Captives, however, showed a slight decline, suggesting a more cautious stance compared to a year ago.
• Channels: The most notable year-over-year improvements were in non-captive new and franchise used, indicating stronger credit availability in both new and used vehicle segments. Independent used also improved, though more modestly.

Implications for Consumers and Lenders

• Consumers: The continued improvement in credit access, especially in used and non-captive new vehicle segments, offers more financing opportunities. The slight drop in down payments and contract rates may enhance affordability. However, consumers should remain mindful of longer loan terms and stable negative equity levels when evaluating loan offers.
• Lenders: The mixed performance across lender types reflects varying risk appetites and strategic priorities. Finance companies and captives appear to be expanding access, while banks and credit unions are slightly more conservative. As credit conditions evolve, lenders must balance growth with prudent risk management, especially amid shifting rate environments and consumer behavior.

Overall, the June Dealertrack Credit Availability Index reflected a continued loosening in auto credit conditions, supported by broader lender participation and easing rate pressures. Credit access improved across all sales channels and most lender types, with finance companies and captives leading the expansion. Consumers benefited from slightly lower borrowing costs and increased approval rates, while lenders balanced growth with cautious adjustments to risk exposure.

The Dealertrack Credit Availability Index tracks six factors that affect auto credit access: loan approval rates, subprime share, yield spreads, loan term length, negative equity and down payments. Reported monthly, the index indicates whether access to auto credit is improving or declining. This typically means that it is cheaper and easier for consumers to obtain a loan or more expensive and harder. The index is published around the 10^th of each month.

Jonathan Gregory

Senior Manager, Economic and Industry Insights

Jonathan Gregory is a Senior Manager on Cox Automotive’s economic and industry insights team, which works to find actionable insights for the industry posed by Cox Automotive clients. Jonathan works with the Sales, Finance, and Data Science organizations and creates innovative solutions often combining proprietary data from other Cox Automotive brands. Jonathan joined Cox Automotive in 2022.