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Data Point

Access to Auto Credit Mixed in December

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In December 2024, the Dealertrack Credit Availability Index revealed a notable improvement in auto credit access across all channels and lender types. The All-Loans Index reached 95.5, marking a 0.2% increase from November and a 1.9% rise year over year. This is the highest level of auto credit access since March 2023.

Dealertrack Credit Availability Index1

Auto loan access improved in December and was up year over year

All Auto Loans Index (Jan2019=100)

Key Drivers of Credit Access

  1. Approval Rates: The approval rate increased by 40 basis points (BPs) in December, a key factor in driving improved credit access. The increase in approval rates and the narrowing of yield spreads mean that more consumers are getting approved for loans – and at better rates. This upward trend offsets some restrictive measures observed in other credit factors.
  2. Yield Spreads: The 5-year U.S. Treasury increased by 2 BPs in December, leading to a smaller yield spread. Yield spreads narrowed by 25 BPs, making auto loan rates more favorable compared to bond yields. The average auto loan rate dropped by 23 BPs from November. Notably, auto loan rates have decreased by 175 BPs since March. The narrowing yield spreads and the drop in average loan rates make borrowing conditions more favorable for consumers, leading to lower monthly payments and decreased overall loan costs.
  3. Subprime Loan Share: The subprime share decreased by 50 BPs in December, although it increased year over year. While a smaller presence of high-risk loans can tighten access for some borrowers, the impact was balanced by more favorable dynamics elsewhere.
  4. Loan Term Length: The share of loans with terms greater than 72 months fell by 20 BPs, continuing a four-month trend of decreasing long-term loans. While facing shorter loan terms could mean higher monthly payments, it also means consumers can pay off the loan faster and potentially save on interest over the life of the loan.
  5. Negative Equity: Loans with negative equity decreased sharply by 120 BPs in December but remained up year over year. While fewer negative equity loans can signify healthier financial conditions overall, it may narrow access for some borrowers.
  6. Down Payment Percentage: The down payment percentage decreased by 20 BPs compared to last month and remains up slightly compared to December 2023. Higher down payments can challenge consumers but can also lead to lower monthly payments and less interest over time.

Channel and Lender Trends

  • Channels: Credit access was mixed across all sales channels in December, with used-vehicle loans from franchised dealers experiencing the most loosening. Used-vehicle loans from independent dealers tightened the most.
  • Lender Types: Lender types saw mixed results with access to credit availability. Credit unions showed the most loosening, while captives showed the most tightening.

Year-Over-Year Comparison

Credit access in December was looser than a year ago. This improvement was observed across all channels and lender types. 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 banks loosened the least.

Implications

The December Dealertrack Credit Availability Index illustrates mixed results in credit access for auto loans. Consumers benefited significantly from tightening yield spread, higher approval rates and more favorable loan rates, which played critical roles in pushing the index slightly upward. Meanwhile, the persistence of certain tightening factors – like shorter loan terms, higher down payments, and a reduced share of subprime loans – was not enough to reverse the loosening trend.

For consumers, this means better borrowing conditions and easier access to auto financing, particularly when purchasing used vehicles from franchised dealers. Lenders are also navigating a mixed environment as credit demand intersects with loosening policies for credit unions and auto-focused finance companies but tightening at banks and captives.


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 be published around the 10th of each month.

1In November 2023, the data behind the Dealertrack Auto Credit Availability Index was reset by our data sciences team as part of a migration to a new data management system. All points in the data set were reestablished, with January 2019 in the index set at 100 (as it had been previously). The All-Loans Index plot used in this post utilizes the new data set. The absolute numbers have shifted, but the trends and narrative have not. For more information, contact the Cox Automotive team.

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.

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