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Data Point

Auto Credit Availability Drops to Two-Year Low

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Article Highlights

  1. Access to auto credit tightened again in May, according to the Dealertrack Credit Availability Index for all types of auto loans.
  2. Following tightening across all channels and all lender types in April, credit availability declined again in May in most channels.
  3. The All-Loans Index fell 0.4% to 96.4 in May, the lowest reading since February 2021, and reflected that auto credit was harder to get in the month than every month since then.

Access to auto credit tightened again in May, according to the Dealertrack Credit Availability Index for all types of auto loans. Following tightening across all channels and all lender types in April, credit availability declined again in May in most channels. The All-Loans Index fell 0.4% to 96.4 in May, the lowest reading since February 2021, and reflected that auto credit was harder to get in the month than every month since then. With the decline in May, access was tighter by 8.0% year over year, and compared to February 2020, access was tighter by 2.8%.

Dealertrack Credit Availability Index

Auto loan access declined in May and was down substantially year over year

All Auto Loans Index (Jan2019=100)

Credit Availability Factors Mixed in May

Movement in credit availability factors was mixed in May. Yield spreads narrowed, average terms lengthened, and down payments declined, and those moves improved credit access for consumers. However, the subprime share declined, and the negative equity share declined, and those moves hurt credit access for consumers.

The average yield spread on auto loans in May narrowed by 10 BPs, so rates consumers saw on auto loans were more attractive in May relative to bond yields. The average auto loan rate declined by 4 basis points (BPs) in May compared to April, while the 5-year U.S. Treasury increased by 6 BPs, resulting in a narrower average observed yield spread.

The approval rate was unchanged in May but was down 2.4 percentage points year over year. The subprime share declined to 11.0% from 11.7% in April and was down 1.2 percentage points year over year.

The share of loans with greater than 72-month terms increased 0.6 percentage points but was down 0.2 percentage points year over year.

Most Loan Channels Saw Credit Tightening in May

Most channels saw declining credit availability in May. Independent used loans saw the only expansion in credit access during the month, while certified pre-owned (CPO) loans saw the most tightening. On a year-over-year basis, all channels were tighter, with CPO loans having seen the most tightening.

Credit Availability Declined for Most Lender Types

Credit availability also declined in May across most lender types. Auto-focused finance companies loosened while all other lender types tightened, and credit unions tightened the most. On a year-over-year basis, credit access was tighter across all lender types, with auto-focused finance companies tightening the least while credit unions tightening the most.

Each Dealertrack Auto Credit 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.

Measures of Consumer Confidence Mixed in May

The Conference Board Consumer Confidence Index® declined by 1.4% in May, as views of both the present situation and future expectations declined. Consumer confidence was down 0.9% year over year. Plans to purchase a vehicle in the next six months increased and were up year over year. The confidence index did not fall as much during the pandemic as the sentiment index from the University of Michigan, but both series declined in May. The Michigan index declined 6.8% for the month but was up 1.4% year over year. Consumers’ views of vehicle buying conditions fell in May to the lowest level this year but remained better than a year ago. The daily index of consumer sentiment from Morning Consult declined 1.8% in May. Consumer attitudes have been sensitive to inflation and especially the price of gasoline for over a year now, but gas prices fell slightly in May. According to AAA, the national average price for unleaded gas declined 1% in May to $3.57 per gallon, which was down 23% year over year.


The Dealertrack Credit Availability Index is a 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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