Auto rejection rates drop to 6.7% in June (Big Wheels)

Auto loan applicants were rejected less often in June amid declining auto loan application rates and an increasing share of 0% APR loans, but expectations of rejection rose. The percentage of respondents who applied for auto loans over the past 12 months and were denied in June hit 6.7% compared with 18.5% in June 2024 and 14% in February , according to the Federal Reserve Bank of New York ’s Survey of Consumer Expectations Credit Access Survey published July 21. The survey is updated in February, June and October each year. The volume of auto finance applicants rose in June, with the percentage of survey respondents who applied for an auto loan at 13.5%, compared with 12.1% in June 2024 and 13.3% in February, according to the survey. [caption id="attachment_58353644" align="alignnone" width="911"] (Courtesy/Big Wheels)[/caption] The rate of respondents who believed their auto credit application would be rejected hit 30.6% in June compared with 29.4% in June 2024 and 33.5% in February, according to the survey. The February mark was the highest expected rejection rate since the metric was first tracked in October 2013. The expected applicant volume also rose in June. The volume of people who indicated they are likely to apply for an auto loan in the next 12 months landed at 10.5% in June, compared with 9.1% in June 2024 and 9.9% in February. [caption id="attachment_58353646" align="alignnone" width="923"] (Courtesy/Big Wheels)[/caption] In fact, some credit unions and lenders that work with Tampa, Fla.-based Morgan Automotive Group have tightened credit and raised interest rates for auto financing, Justin Buzzell , vice president of financial services, told Auto Finance News . However, credit unions have remained consistent in their buying practices overall despite the tightened standards, Buzzell said. “For the most part, I would say we have seen a good amount of business being assigned to our indirect credit union partners each month,” he said. 0% APR auto loans up Meanwhile, credit access strengthened in June as businesses offered more low-APR financing rates The share of auto loans with 0% APR financing hit its highest percentage in over three years in June, according to Cox Automotive data published July 22. “Manufacturers are getting more aggressive again to keep the market moving, and that could explain the improving trend in retail sales.” — Jonathan Smoke , chief economist at Cox Automotive [caption id="attachment_58353647" align="alignnone" width="1165"] (Courtesy/Cox Automotive)[/caption] The average rate on a new-vehicle loan was 7.7% as of July 21, down 24 basis points (bps) YoY from July 5, 2024, according to the latest data from Curinos . Used-vehicle loan rates averaged 7.7% as of July 21, down 26 bps YoY. By comparison, the average new vehicle loan interest rate peaked at 10% in mid-June 2024, while the average used-vehicle loan interest rate peaked at 14.8% in February, according to Cox Auto. “Like gas prices, rates are drifting lower, improving affordability,” Smoke said. Auto Finance Summit, the premier industry event for auto lending and leasing, returns Oct. 15-17 at the Bellagio Las Vegas. To learn more about the 2025 event and register, visit www.AutoFinance.live/AFS .

Auto rejection rates drop to 6.7% in June (Big Wheels)

Expected rejection rate was 30.6% for month

Lower rejection rates aid improved industry performance (Big Wheels)

Fed: Auto loan demand grows, standards ease (Big Wheels)

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