Most economic news is reasonably good for car shoppers, but car loans grew less favorable in December.
The Dealertrack Auto Credit Availability Index tracks how difficult it is to qualify for all types of car loans. It dropped 0.9% in December, reaching its lowest level since May and erasing improvements made in the summer and fall. Kelley Blue Book’s parent company, Cox Automotive, publishes the index.
Credit access at every type of lender ended 2023 tighter than a year ago.
Related: Fed Holds Rates Steady; Auto Lenders Start Lowering Them
Two measures improved for consumers — the approval rate increased, and the share of subprime borrowers grew, indicating that those with credit scores below 620 qualified for more loans.
But lenders asked for longer terms and accepted less negative equity. Down payments remained at the same level as November but remained at the highest level in the index’s history.
Credit unions employed tighter standards than banks and the automakers’ captive lenders.
Despite tightening credit, Americans’ expectations for the economy are improving. The Conference Board Consumer Confidence Index increased by 9.6% in December, as views of the present situation and future expectations improved strongly. Consumer confidence was up 1.6% year over year. Plans to purchase a vehicle in the next six months increased and were up year over year.
