MENU
SEARCHDecember brought some of the best borrowing availability for consumers in years, though lenders tightened their reins on riskier segments of the market.
Consumers in negative equity rose 10 basis points to about 53%, up 250 basis points year-over-year.
Pexels
Auto consumers found more credit opportunity in December than at any point in more than three years, a bit of good affordability news amid an onslaught of cost pressures.
Cox Automotive reported that its credit availability index hit 99.6, its highest level since October 2022. Its All-Loans Index was up 4% year-over-year and 90 basis points over November.
The improvement started in the summer of 2024, said Cox, which pointed out that not all auto credit metrics reflected positive movements.
Approval rates were up for the second straight month, this time by nearly 100 basis points from both November and a year earlier to about 74%.
Yield spread contracted slightly, by 18 basis points, to 6.6, and the average contract rate fell 16 basis points to 10.3%, movements Cox credited for the lion’s share of index improvement.
The down payment percentage fell slightly, by 10 basis points to about 13%, which Cox said could mean either increased demand or more lender flexibility.
Meanwhile, the subprime share of auto loans fell 20 basis points to 14%, but that was up year-over-year by 230 basis points, ”suggesting lenders are tightening access for higher-risk borrowers,” according to Cox.
“Despite the recent moderation, subprime lending remains significantly elevated compared to a year ago,” according to the company’s report by Senior Manager, Economic and Industry Insights Jonathan Gregory.
At the same time, loan terms longer than 72 months rose 20 basis points from November and were up nearly 400 basis points from a year earlier to 27%, underlining the segment of consumers stretching the cost over time to afford trading.
Similarly, consumers in negative equity rose 10 basis points to about 53%, up 250 basis points year-over-year.
“While the modest monthly increase partially reverses November’s 140 bps improvement, the share remains near the lowest levels seen in 2025, signaling relatively contained risk levels despite the uptick,” Cox said.
Credit availability improved across all lender types, led by captives, and in all channels except certified preowned, which fell about half a percentage point.
“Finance companies, captives, banks and credit unions all appear to be expanding access but are more cautious about risk,” Cox said.
Originally posted on F&I and Showroom
Consumers are seeking ways to make financing new-vehicle purchases manageable, from extended loan terms to smaller down payments, according to Edmunds.
Read More →
AutoPayPlus says extra-long auto loans are trapping consumers and threatening the dealer trade-in cycle, and that the industry is leveraging the wrong tools to combat high MSRPs.
Read More →
Better financing conditions and the potential to save money on monthly payments could drive more consumers to buy out their vehicle leases instead of opting for a new lease payment.
Read More →
Managing a deal from submission to funding works best from a mix of efficient transactional methods and a customer-focused approach.
Read More →
The share of subprime, longest loan terms grow in Q4 as consumers take on more debt over longer terms to afford higher vehicle prices, Experian research finds.
Read More →
A StoneEagle 2025 industry report reads like a stress test. In a noisy year, F&I became the foundation that kept the house standing when the front end thinned.
Read More →
Over half of insurance holders ages 18 to 29 reported to be 'somewhat' likely to change providers in the next 90 days, according to CivicScience, which found that interest was lower among older age groups.
Read More →
Deal volume ebbed and flowed throughout 2025, but product performance remained steady, according to automotive technology and data intelligence solutions provider StoneEagle.
Read More →
Joel Kansanback – CEO of Strategic Dealer Advisory – will take to the stage at the 2026 event.
Read More →
A new top 10 list ranks the least expensive for average full insurance coverage on a clean driving record and high driver credit scores.
Read More →