Summary
Auto credit access was stable in January, with the Dealertrack Credit Availability Index holding at 100.0—its strongest level since October 2022 and nearly 5% above January 2025. Beneath the flat headline, conditions were mixed: approval rates slipped, subprime activity increased, loan terms lengthened, and negative equity climbed, while borrowing costs rose as lenders priced for higher risk.
By the numbers (January)
- Dealertrack Credit Availability Index: 100.0 (flat month over month; best since Oct 2022; ~+5% year over year)
- Approval rate: 71.8% (−110 bps MoM; +40 bps YoY)
- Subprime share: 15.7% (+70 bps MoM; +290 bps YoY)
- Average contract rate: 10.9% (+39 bps MoM)
- Yield spread: 7.14 pp (+31 bps MoM); 5-year U.S. Treasury: 3.78% (+8 bps)
- Loan terms >72 months: 28.0% (+50 bps MoM; +400 bps YoY)
- Negative equity share: 56.3% (+220 bps MoM; +470 bps YoY)
- Average down payment share: 13.4% (+10 bps MoM; −80 bps YoY)
Channel and lender trends
- Access improved most in non-captive new, followed by all-new and CPO; it fell in franchised-used (−0.5%) and all-used (−0.2%).
- Lenders: Captives loosened the most (+1.2%), banks (+0.4%), credit unions (+0.1%), finance companies unchanged.
- Year over year: Most channels and all lender types loosened; franchised used and non-captive new led gains. Banks and auto-focused finance companies led among lenders; captives improved; credit unions remained cautiously positive.
Implications
For consumers: Some segments are easier to finance—helped by longer terms and more subprime availability—but loans are more expensive as spreads widen and rates rise. Longer terms can lower payments yet raise the risk of owing more than the vehicle’s value, especially as negative equity increases.
For lenders: Growth is supported by longer terms and increased subprime exposure, but portfolio risk is rising. Elevated negative equity may amplify losses if delinquencies increase and used-vehicle prices soften.
Market dynamics
Retail pricing moved up faster than wholesale benchmarks: the 5-year Treasury ticked higher modestly, while auto loan rates rose more, widening spreads as lenders added margin for perceived risk.
Index context
The index aggregates six components—approval rates, subprime share, yield spreads, loan term length, negative equity, and down payments. Increases signal looser (generally easier/cheaper) credit; decreases indicate tighter or more expensive credit.
Bottom line
Heading into 2026, auto credit access is broadly stable at multi-year highs, but borrowing is getting more expensive and risk indicators—especially negative equity—are building.
