Approvals Tighten But Subprime Gains Ground in Mixed January Report
The approval rate for U.S. car buyers seeking dealer-arranged financing fell by 100 basis points from December to January, according to the latest Credit Availability Index report from Dealertrack (div. Cox Automotive). But banks, finance companies and captive finance companies extended credit to more subprime borrowers on more generous terms.
The All-Loans Index remains at 100.0, unchanged from a corrected December reading and up by about 5% from a year ago.
Loans were approved at a 71.8% rate in January, down from the prior month but a 40-basis point improvement over January 2025. In the same period, subprime’s share of all loans increased by 290 basis points to 15.7%. The share of loans with terms greater than 72 months grew by 50 basis points to 28%.
“The average down payment percentage increased by 10 bps (from 13.3% to 13.4%) but is down 80 bps year over year, reversing December’s decline,” notes Cox Senior Manager Jonathan Gregory in a release. “This modest increase may reflect lenders requiring slightly more upfront capital or consumers voluntarily putting more down, though down payments remain well below year-ago levels.”
