Auto credit access was mixed in February, though Cox Automotive’s All-Loans Index reached a two-year-plus high.

Overall credit availability was better than a year earlier, making loans more accessible for borrowers with lower credit scores, though borrowing costs may be higher due to down-payment requirements and higher yield spreads, Cox said.

Generally, the month marked higher approval rates, increased subprime loan access, longer-term loans, and more room to roll over negative equity. 

Credit access improved in all channels except new-vehicle loans and was mixed among lender types, captives pulling back the most. The All-Loans Index hit about 96, up 3% year-over-year and its highest since December 2022, Cox said.

The loan approval rate inched up 10 basis points and the subprime share by 150 basis points. The share of loans with terms of more than 72 months increased 50 basis points, a sign of increased monthly affordability that can nevertheless increase loan lifetime cost.

“The increase in longer-term loans may indicate that consumers are seeking ways to manage their monthly expenses, even if it means paying more interest over time,” Cox said in its report.

Meanwhile, the share of borrowers in negative equity increased 110 basis points, revealing growing financial fragility among auto consumers.

The average down payment was up just 10 basis points, lowering loan amounts but increasing risk for borrowers with low savings.

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