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Data Point

Auto Credit Availability Begins to Tighten in May

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Article Highlights

  1. Access to auto credit tightened in May, according to the Dealertrack Credit Availability Index for all types of auto loans.
  2. The All Loans Index declined 0.8% to 105.4 in May, reflecting that auto credit was harder to get in the month compared to April.
  3. The index in May was the second-highest recorded in the data series going back to January 2015.

Access to auto credit tightened in May, according to the Dealertrack Credit Availability Index for all types of auto loans. The All Loans Index declined 0.8% to 105.4 in May, reflecting that auto credit was harder to get in the month compared to April. Access was looser by 7.9% year over year, and compared to February 2020, access was looser by 6.3%. The index in May was the second-highest recorded in the data series going back to January 2015.

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Two key credit availability factors moved substantially against consumers in May. The average yield spread on auto loans widened slightly, so rates consumers saw on auto loans in May moved more than bond yields. The average auto loan rate increased by 13 Basis Points (BPs) in May compared to April, while the 5-year U.S. Treasury increased by 9 BPs, resulting in wider observed yield spreads.

Most loan types saw credit tightening in May, with new loans tightening the most, but used loans through independents loosened slightly. On a year-over-year basis, all loan types were easier to get, with certified pre-owned (CPO) loans loosening the most.

Credit access also tightened across most lender types in May, with captives tightening the most but auto-focused finance companies loosening. On a year-over-year basis, all lenders had looser standards, with auto-focused financed companies loosening the most.

Each Dealertrack Credit Availability Index tracks shifts in loan approval rates, subprime share, yield spreads and loan details, including term length, negative equity, and down payments. The index is baselined to January 2019 to show how credit access shifts over time. Across all auto lending in May, the approval rate increased slightly, terms lengthened, negative equity grew slightly, and the down payment percentage declined slightly. The moves in those factors made credit more accessible. However, yield spreads widened, and the subprime share declined, so those factors moved against accessibility.

Measures of consumer sentiment decline again in May. According to the Conference Board, Consumer Confidence declined 2.0% in May. The decline left confidence down 11.3% year over year. The underlying measures of both the present situation and future expectations declined. Plans to purchase a vehicle in the next six months declined but were slightly higher than a year ago. Plans to purchase a home also declined and were higher year over year. The sentiment index from the University of Michigan declined 10.4% in May as both current conditions and expectations declined. The Michigan reading was down slightly from midmonth and was at the lowest full-month reading since August 2011. Buying conditions for vehicles declined and were only slightly better than the all-time low recorded in February. The Morning Consult daily index also declined in May, down 4.4% for the month. The daily index from Morning Consult was at its lowest level so far for the pandemic on May 30, as inflation, declining equity markets, and increasing cases of COVID driven by omicron variants weighed on consumer attitudes.


The Dealertrack Credit Availability Index is a new monthly index based on Dealertrack credit application data and will indicate whether access to auto loan credit is improving or worsening. The index will be published around the 10th of each month.

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