Americans had an easier time qualifying for a new car loan in November. Auto lenders spent much of 2024 tightening their standards but have eased terms so much in the last two months that it’s as if 2024 didn’t happen. Qualifying for a car loan is now easier than at any point since October of 2023.
The Dealertrack Credit Availability Index tracks how difficult it is to qualify for all types of car loans. Kelley Blue Book parent company Cox Automotive publishes the index.
Car dealers are negotiating this winter, with the average new car buyer getting an 8% discount last month. The final sale price of the average new car rose in November, but only because Americans chose more expensive cars with discounts relatively easy to find.
Lenders approved more applications in November, and approved them at better rates. The rate of the average auto loan dropped 28 basis points during the month. Notably, auto loan rates have decreased by 152 BPs since March. The Federal Reserve has now cut its baseline interest rate three times since September.
Most analysts expect further cuts heading into spring.
Not every change, however, was in shoppers’ favor. Lenders asked for slightly higher down payments in November, approved fewer loans longer than 72 months, and approved fewer with negative equity.
The share of subprime loans – those to borrowers with credit scores under 600 – also shrank by 40 BPs.
