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Auto loan approval ratings hit highest level since 2015

It hasn’t been this easy to get a car loan in years.

Why it matters: It comes amid a demand bonanza that got underway at the onset of the pandemic — when traveling by car became the more appealing mode of transportation.


Car loan approval ratings are at the highest since 2015, according to Cox Automotive.

  • What's happening: Auto loans are getting cheaper and lengthier, two factors that lower monthly payments — what "most consumers are focusing on, more than anything else," says Cox Automotive economist Jonathan Smoke.
  • "Consumers have been consistently seeing better rates every month this year than a year ago — that's really helped offset some of the inflation in vehicle prices," Smoke says.

The big picture: The net percentage of banks making loans harder to get is at the lowest level since 2012 — a sign that lenders are keeping borrowing conditions loose, if not making them looser.

  • It's a sharp reversal from last year, when it looked like the economy was on the precipice of disaster.
  • Meanwhile, the net share of banks reporting stronger demand for auto loans hit a new pandemic-era high (also the highest in nine years).

But, but, but: "Banks aren't just giving loans to anyone," says Jesse Rosenthal, an analyst at CreditSights.

  • Around a third of auto loan originations are going to people with credit scores above 760 — higher than it was trending previously, Rosenthal says.

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