It’s becoming easier for Americans to qualify for a car loan, though lenders are getting stricter about some loan terms.
The Dealertrack Credit Availability Index tracks how difficult it is to qualify for all types of car loans. The likelihood increased by 0.2% in December – a small adjustment in favor of car shoppers. Kelley Blue Book parent company Cox Automotive publishes the index.
It ended the year 1.9% higher than it started.
More Approvals, but Rejection of Some Terms
The loan approval rate increased by 40 basis points in December. The average auto loan rate dropped by 23 basis points. That means more Americans qualified for new loans, and qualified at lower rates.
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However, lenders were less likely to approve loan terms over 72 months — a measure that can drive down monthly payments but keep borrowers in debt for longer. They were also less likely to accept negative equity.
The proportion of subprime loans — those for borrowers with credit scores of 620 or lower — decreased.
