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July Was Hot for Auto Borrowers

Credit proved readily available for many, but most loans left buyers in negative territory, Cox Automotive said.

August 12, 2026
A fan of $100 bills sitting on a white envelope

Down payments in the month fell 22 basis points to 13%, the lowest level in nearly four years.

Credit:

Pexels/Pixabay


2 min to read


U.S. automotive consumers generally found easy, if not cheap, credit in July as the approval rate neared 75% and access reached its widest point in more than a decade.

The sizzling numbers compiled by Cox Automotive credit data trackers set the company’s credit availability index at 105, its highest point since November 2015.

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A 37 basis-point increase in the auto loan approval rate to 74% brought it in line with the level recorded a year earlier, Cox said.

The data provider, though, counted a 20 basis-point yield spread narrowing as the main factor in the looser credit availability. The spread closed the month at 6.57%, its leanest since January 2025.

To balance risk, lenders pulled back on subprime loan share by 21 basis points from May to 16.4% for its fourth straight month of declines, despite subprime applications being up, Cox reported. But that’s still up by a dramatic 267 basis points year-over-year.

Lenders also held the line on other risk factors. Auto loans longer than 72 months were flat at 31%, though that’s the metric’s historical high and up 484 basis points year-over-year, Cox said.

Loans in negative equity, meanwhile, fell 23 basis points to about 57%, a fourth straight monthly drop, though that’s not far off the historical high of 59% in March and up 269 basis points year-over-year.

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As Cox put it, “…a majority of loans were written for more than the vehicle was worth.”

Down payments in the month fell 22 basis points to 13%, the lowest level in nearly four years.

Captive lenders loosened credit availability by nearly a percentage point for the second biggest increase among lender categories for the month, Cox reported.

DIG DEEPER: Helping the Credit-Crunched

Originally posted on F&I and Showroom

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