Credit Availability Up 3.1% to 3-Year High
Dealertrack (div. Cox Automotive)’s All-Loan Index improved to 96.4% in March, a 3.1% year-over-year gain and a half percentage point higher than February’s 95.9%, the highest level of auto loan access since December 2022.
Approval rates increased by 150 basis points last month, including a 220-BP increase in the share of subprime loans. Analysts say loan terms greater than 72 months decreased by 50 BPs. Last week, Edmunds reported 84-month loans hit an all-time high in the first quarter, accounting for 19.8% of new vehicle financing.
“For lenders, the increased subprime share and longer loan terms indicate a willingness to take on more risk,” Dealertrack’s report states, in part. “However, the higher yield spreads and down payment requirements suggest that lenders are also taking steps to mitigate this risk. Lenders will need to balance their risk appetite with prudent lending practices to ensure the stability of their loan portfolios.”
