Sales and F&I

Dealertrack Credit Availability Index - Month Ending January 2024

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Dealertrack Credit Availability Index (Month ending January 2024) In today's marketplace, we are all looking for insights to help us plan more effectively. At Cox Automotive, our common goal is to partner, and provide data that may assist in your current planning. To help guide and plan, we publish the Dealertrack Credit Availability Index monthly. STATUS: Auto Credit Availability Worsened Again in January Access to auto credit declined in January as credit tightened across all channels and across most lender types compared to December, according to the Dealertrack Credit Availability Index. The All-Loans Index declined to 93.0 in January, down 3% year over year. The Dealertrack Auto Credit Total Loan Index had shown some improvements during the summer and fall of last year, but those gains have been wiped out by the declines seen over the past three months. In fact, the index dropped by 1% in January, marking the lowest level since August 2020. Credit access was tighter than a year ago in all channels and all lender types. Compared to February 2020, credit access was tighter in all channels except for used sales through independent dealers and loans from auto finance companies. Most January Credit Availability Factors Moves Against Consumers Credit availability factors mostly moved against consumers in January. Yield spreads widened, term length, approval rate, and subprime share all declined, and those moves reduced credit access for consumers. An increase in the negative equity share represented the only improvement for consumers. The down payment share was unchanged but at the highest level in the history of the data series. By channel, new-vehicle loans saw the most tightening, while used-vehicle loans through independent used dealers saw the least amount of tightening. On a year-over-year basis, all channels were tighter, with used-vehicle loans through franchised dealers having seen the most tightening. Banks tightened the most among lenders in January, but credit unions were the tightest year over year. The average yield spread on auto loans in January widened by 15 Basis Points (BPs), so rates consumers saw on auto loans were less attractive in January relative to bond yields. The average auto loan rate increased by 13 BPs in January compared to December, while the 5-year U.S. Treasury decreased by 2 BPs, resulting in a wider average observed yield spread. The approval rate decreased by 8 BPs in January and was down 1.6 percentage points year over year. The subprime share decreased to 11.2% in December from 11.4% in December and was up 0.6 percentage points year over year. The share of loans with greater than 72-month terms decreased by 2 BPs and was down 1.8 percentage points year over year.

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