This edition of the Auto Market Weekly Summary includes updates on credit availability, auto loan performance, and producer prices. Additional March data arrived in the past week, as the spring selling season continued to deliver, credit availability improved further and wholesale values were holding firm. At the same time, the energy shock from the Middle East conflict began to appear clearly in producer prices, and auto loan default rates rose, even as delinquencies remain relatively contained.

Bottom Line Up Front

The Middle East conflict is reshaping the inflation story in real time, and the March producer price report—which captured only the first half of the month’s oil price surge—signals that the worst of the upstream cost pressure is still ahead.

The demand picture, however, is holding up better than the macro headlines suggest. Tax refunds have pushed $242 billion back to consumers as of early April, up nearly 15% against last year. Importantly, only an estimated 57% of returns have been filed, nearly seven points below last year’s pace at this point, suggesting meaningful volume of refund dollars is still to come.

That tailwind is showing up in wholesale markets: Our mid-month report from Manheim shows that seasonally adjusted values this spring have been above what we’d normally expect for this time of year, and the month isn’t over yet.

On the credit side, access continues to broaden. The Dealertrack Credit Availability Index in March reached its best level since June 2022, but the underlying picture carries increasing caution. Negative equity was an all-time high in the last measure and default rates were notably higher.

Credit Availability

Auto credit access continued to expand in March. Beneath the headline, some trends are more nuanced as factors such as expanding subprime share and widening yield spreads are observed in the data.

  • The Dealertrack Credit Availability Index shows that improving credit access is broad-based across all channels and lender types; banks led with their strongest monthly gain in several years, while captives reached their highest level since April 2022.
  • Subprime lending reached its highest share since March 2020, reflecting lender willingness to accept more risk. Yield spreads widened as subprime share rose.
  • Negative equity rose to a new all-time high for the third consecutive month.
  • Loans exceeding 72 months remained near record levels.

Auto Loan Delinquency and Defaults

Auto-loan delinquency rates fell across the board in March and are just slightly above last year’s levels. However, default rates rose to their highest level since 2010. Total defaults are now running 9% higher on a year-to-date basis.

  • The 60+ days past-due delinquency rate fell to 1.97% in March, lower by 17 basis points against February and higher by just two basis points against year-earlier levels.
  • The default rate rose to an annualized 3.79% in March, up from 3.36% in February — the highest level since early 2010.
  • Defaults and delinquencies typically peak in spring, with defaults potentially peaking a month later than delinquencies.
  • Total auto loan account volume is down 2% against last year while balances are up nearly 1%, reflecting fewer consumers with auto loans but higher amounts financed.
  • Subprime loan accounts are higher by 1% against last year, while near-prime, prime, and prime-plus accounts have all declined.

Producer Prices

Producer prices rose again in March, with the Middle East conflict’s impact on energy costs emerging as the dominant driver.

  • The final demand index rose 0.5% in March, driven entirely by a 1.6% surge in goods prices—led by an 8.5% jump in energy—while services prices were unchanged.
  • On a year-over-year basis, producer prices are now up 4%, the largest 12-month gain since February 2023.
  • Gasoline accounted for nearly half of the goods increase, with diesel fuel, jet fuel, and home heating oil also moving sharply higher.
  • Processed goods for intermediate demand surged 2.6% in March—the largest monthly increase since May 2022—driven by an 11.3% jump in processed energy goods fueled by rapid increases in diesel. This could signal that upstream cost pressures are intensifying and will likely continue moving downstream towards consumers in the months ahead.