Auto Credit Access Dips in April

In April 2025, the Dealertrack Credit Availability Index revealed notable changes in auto credit access across various metrics. The All-Loans Index was 95.7 in April, compared to 96.3 in March, indicating a month-over-month decrease of 0.7% and a year-over-year increase of 0.7%.

Dealertrack Credit Availability Index

Auto loan access was down in April and up year over year

All Auto Loans Index (Jan 2019 = 100)

Key Drivers of Credit Access

1. Approval Rates: The approval rate for auto loans increased by 20 basis points (BPs) in April. This increase indicates that more consumers were able to secure auto loans, reflecting a more favorable lending environment. Higher approval rates can be attributed to lenders’ confidence in the economic outlook and consumers’ ability to repay loans.
2. Subprime Share: The subprime share of loans, representing loans given to borrowers with lower credit scores, decreased by 280 BPs in April. This suggests that lenders are slightly more cautious about extending credit to higher-risk borrowers compared to March.
3. Yield Spread: The yield spread decreased by 54 BPs compared to February. The contract rate was 11.49% in March and 11.12% in April. The 5-year treasury note was 4.04% in March and 3.91% in April. Lower yield spreads indicate lower costs for borrowers, which could be a response to the decreased subprime share. This trend suggests that while lenders are slightly more cautious, they are also offering more favorable interest rates.
4. Loan Term Length: The share of loans with terms greater than 72 months increased by 130 BPs in April. Longer loan terms can make monthly payments more affordable for consumers, but they also result in higher overall interest costs over the life of the loan. The increase in longer-term loans may indicate that consumers are seeking ways to manage their monthly expenses more conservatively.
5. Negative Equity Share: The negative equity share, representing the proportion of borrowers who owe more on their loans than the value of their vehicles, increased by 10 BPs in April. This rise is an important indicator of financial stress among borrowers. Higher negative equity shares can lead to increased default rates, as borrowers may struggle to keep up with payments on loans that exceed the value of their assets.
6. Down Payment Percentage: The average down payment percentage required for loans remained stable at 14.7% compared to March. Higher down payments can reduce the loan amount and the risk for lenders, but they can also pose a challenge for consumers who may not have sufficient savings.

Channel and Lender Trends

• Channels: Credit access tightened across all sales channels in April compared to March, except for the used independent category, which was flat. New auto loans experienced the most tightening.
• Lender Types: Lender types saw mixed results with access to credit availability month over month. Captives showed the most tightening, while auto-focused finance companies showed the most loosening.

Year-Over-Year Comparison

Credit access in April was looser than a year ago. This improvement was observed across all channels and lender types. Year over year, credit access loosened the most for non-captive new-vehicle sales and the least for independent used sales. Among lender types, credit unions showed the most significant loosening over the past year, while auto-focused finance companies loosened the least.

Implications for Consumers and Lenders

• Consumers: For consumers, the access to auto credit did not improve in April, particularly for those with lower credit scores. The subprime share of loans decreased, indicating that lenders were more cautious about extending credit to higher-risk borrowers. Additionally, the lower yield spreads mean that borrowing costs may be lower. Consumers should carefully consider the terms of their loans and their ability to manage monthly payments and overall debt.
• Lenders: For lenders, the decreased subprime share and longer loan terms indicate a more cautious approach towards higher-risk borrowers. The lower yield spreads suggest that lenders are offering more favorable interest rates. Lenders will need to balance their risk appetite with prudent lending practices to ensure the stability of their loan portfolios.

Overall, the April Dealertrack Credit Availability Index saw notable changes in auto credit availability, reflecting both lender behavior and broader economic conditions. Consumers faced more stringent credit access, while lenders navigated a mixed environment with varying credit demand and policies.

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.