Auto Credit Access Improves Again in July as Yield Spreads Narrow and Approval Rates Climb

Cox Automotive's July Dealertrack Credit Availability Index rose to 105, its highest level since December 2015, as loan approval rates increased for the fourth consecutive month to 74% and borrowing conditions improved. However, affordability pressures remain evident, with a record 31.1% of auto loans extending beyond 72 months, 56.8% of loans carrying negative equity, and down payments falling to their lowest level since October 2022. While financing has become more accessible, many consumers are relying on longer loan terms and financing structures that increase long-term costs to make monthly payments manageable.

The report highlights the continued tension between improving credit availability and vehicle affordability. Auto dealers, lenders, financial institutions and manufacturers have opportunities to educate buyers on financing options while balancing affordability with long-term financial health.