The ability to secure auto credit continues to improve for consumers month over month—as some lenders loosen their standards.
The details: According to Cox Automotive’s Dealertrack Credit Availability Index, credit access ticked up in June—marking the second consecutive month that the conditions improved to secure a loan.
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The All-Loans Index rose to 97.3, up from 96.5 in May, marking a 0.8-point increase month over month for credit access.
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It’s part of a broader run of loosening credit that started in late Summer 2024—with an interruption in April, likely due to the tariff announcements, noted Cox.
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Why it matters: When lenders start approving more subprime borrowers and accepting lower down payments, it typically signals either genuine economic optimism or competitive pressure that forces risk-taking.
By the numbers: Year-over-year, credit access was looser across all channels and most lender types—with loans for non-captive new and franchise used vehicles improving the most and captives dipping slightly.
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Auto loan approval rates increased by 70 basis points (BPs) in June.
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The share of loans with terms greater than 72 months increased by 80 BPs.
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Down payment percentages declined by 40 BPs on average.
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The share of borrowers with negative equity held steady at 54.8%—sustaining the highest level recorded.
Bottom line: If lenders want to maintain loan volumes while vehicle prices stay elevated, the easiest step is to find ways to qualify more borrowers. And while this approach may boost short-term sales, it could build a foundation of financially stressed borrowers who will be vulnerable to any economic downturn or unexpected expense.
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