It was easier to qualify for a car loan in February than in January, according to Kelley Blue Book parent company Cox Automotive.
That doesn’t mean, however, that it was historically easy. Credit access remained tighter than one year before.
The Dealertrack Credit Availability Index tracks car loan applications to indicate whether access to auto loan credit is changing. It improved by almost 1% in February.
Lenders approved more loans in February than in January. But the terms of those loans grew less borrower-friendly. Lenders asked for higher down payments and shortened loan terms – which increases monthly payments.
The share of subprime loans, however, increased. That indicates that borrowers with troubled credit had a slightly easier time obtaining a car loan.
Standards for used car loans loosened the most – good news for buyers since used car prices will likely rise this spring. The wholesale prices dealers pay for the used cars they sell rose last month. Our analysts believe the market is headed for a spring price flip, with used car prices likely to rise and new car prices expected to fall.
Amid recession fears and mixed economic signals, consumer confidence is unsteady. According to the Conference Board, plans to purchase a vehicle in the next six months fell to the lowest level since November 2021.
