The All-Loans Index increased 1.1% to reach 103.7 in September, showing that auto credit was easier to access compared to the month of August and that conditions were looser than before July. The increase showed that access was looser by 4.8% year over year and 4.5% looser compared with February 2020.
The Index showed the average yield spread on auto loans narrowed, meaning consumers saw better rates on auto loans relative to bond yields in September. The average auto loan rate increased by 40 Basis Points (BPs) compared to August, while the 5-year US Treasury increased by 66 BPs.
The subprime share increased to 11.7% in the month, and the share of auto loans with negative equity also increased slightly.
All loan types loosened during September, with all new loans loosening the most and used loans through independent dealers loosening the least. Year over year, all channels saw higher access.
The index also showed credit access expanded across all lender types, with credit unions seeing the most loosening and other lenders close behind.
Adverse outcomes for consumers came in the form of falling approval rates, the share of longer-term loans declines, and an increase in down payment shares.
Meanwhile, The Conference Board Consumer Confidence Index increased by 4.2% in September, with both underlying measures of the present situation and expectations seeing improvement. The sentiment index from the University of Michigan also saw an increase, albeit at a smaller 0.7%, with only views of current conditions improving.
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