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Auto Credit Availability Improved Again for Third Straight Month in October

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Auto Credit Availability Improved Again for Third Straight Month in October


The Dealertrack Auto Credit Availability Index shows that access to auto credit improved in October for all types of auto loans. Credit access loosened across all channels and lender types this fall, continuing the trend that began in the summer. However, even though credit access improved, it was still tighter than a year ago and, in some channels, even tighter than pre-pandemic levels. The All-Loans Index increased by 0.7% to 97.8 in October, which means that access was tighter by 5.7% year over year. Compared to February 2020, access was tighter by 2.1%.

Dealertrack Credit Availability Index

Auto loan access improved in October but was down year over year

All Auto Loans Index (Jan2019=100)

October Credit Availability Mixed Across Channels

Movement in credit availability factors was mixed in October. Subprime share increased, yield spreads tightened, average terms lengthened, negative equity share increased, and those moves improved credit access for consumers. However, approval rate decreased, down payments amount increase, and those moves hurt credit access for consumers.

The average yield spread on auto loans in October tightened by 13 basis points (BPs), so rates consumers saw on auto loans were more attractive in October relative to bond yields. The average auto loan rate increased by 16 BPs in October compared to September, while the 5-year U.S. Treasury increased by 29 BPs, resulting in a narrower average observed yield spread.

The approval rate decreased by 115 BPs in October and was down 1.2 percentage points year over year. This is the lowest approval rates have been since November 2020. The subprime share increased to 11.5% from 11.1% in October but was down 0.5 percentage points year over year.

The share of loans with greater than 72-month terms increased slightly by 4 BPS and was down 1.8 percentage points year over year.

Credit Availability Improved for Most Lender Types in October

Credit availability loosened across all channels in October. New saw the most loosening, while certified pre-owned (CPO) saw the least loosening. On a year-over-year basis, all channels were tighter, with CPO loans having seen the most tightening.

Credit availability loosened in October across most lender types; finance companies tightened. Banks loosened the most. On a year-over-year basis, credit access to all lenders was tighter, with 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 provide a view of how credit access shifts over time.

Measures of Consumer Confidence Declined Again in October

The Conference Board Consumer Confidence Index® declined by 1.6% in October, as future expectations and views of the present situation both declined. Consumer confidence was up 0.4% year over year as three months of declines wiped out the gains from the spring and early summer. Plans to purchase a vehicle in the next six months declined to the lowest level since April and was down year over year. The confidence index did not fall as much during the pandemic as the sentiment index from the University of Michigan. Both series declined over the last three months after improving in June and July. The Michigan index declined 6.0% for the month but was up 1.3% from the mid-month reading. The final index number for the month was up 6.5% year over year. Consumer expectations for inflation increased, with median expectations for inflation over the next year at the highest level since May. The consumer’s view of buying conditions for vehicles improved slightly as views of prices were less negative, but views of interest rates deteriorated. The daily index of consumer sentiment from Morning Consult only measured a small decline in October, as the index declined 0.1% from the end of September. Gas prices fell substantially in October, erasing all of the gains from the spring and summer. According to AAA, the national average price for unleaded gas declined 9.3% in October to $3.46 per gallon, which was down 8% 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.

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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