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.

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