It grew easier for most Americans to qualify for a car loan in September. But credit standards are still easing from some of the worst conditions in recent history. The market remains challenging for many borrowers.
The Dealertrack Credit Availability Index tracks how difficult it is to qualify for all types of car loans. For most classes, the index eased in September.
Kelley Blue Book parent company Cox Automotive owns Dealertrack.
Credit access is tighter than a year ago and, in many channels, tighter than before the pandemic.
Last month, however, approval rates increased, and down payments declined – positive signs for car shoppers. The share of subprime loans for borrowers with credit scores under 620 increased from 11% to 11.1%. Conditions are improving at a crawl for subprime borrowers. Subprime and deep subprime loans were nearly a quarter of the market in 2018 but fell to just 8% this spring.
The average loan term lengthened last month, a move that brings payments down but keeps borrowers in debt for longer.
The Conference Board Consumer Confidence Index declined by 5.2% in September, as future expectations plunged 11.5%, but views of the present situation increased 0.3%. Consumer confidence was down 4.5% year-over-year following two back-to-back months of decline. Plans to purchase a vehicle in the next six months declined but remained up year over year.
