Auto rejections reach second-highest rate recorded in October (Big Wheels)

Auto loan rejection rates soared to the second-highest percentage recorded for October in more than a decade amid rising consumer affordability headwinds. The percentage of respondents who applied for auto loans over the past year and were denied in October hit 15.2%, compared with 14.2% in October 2024 and 6.7% in June , according to the most recent Federal Reserve Bank of New York ’s Survey of Consumer Expectations Credit Access Survey, published Nov. 7. The survey is updated in February, June and October each year. October’s mark was the second-highest rejection rate since the metric was first tracked in October 2013, behind the all-time highest rate of 18.5% in June 2024 . The increase in rejections may show an absence of high-income auto loan applicants, as consumers with higher incomes purchased vehicles ahead of tariff-induced price increases, Moodys’ Analytics Director of Economic Research Michael Brisson told AFN . “There are a close to even number of lenders tightening and loosening credit standards at this time,” he said. Melbourne, Fla.-based Space Coast Credit Union has not adjusted its underwriting standards, but has seen more application denials, Chief Lending Officer Daniel Chiappone told Auto Finance News last month. “More borrowers are not qualifying,” he said. “Not because we’ve tightened [standards], but because the loan-to-value ratio that they’re requesting for their credit score or their debt-to-income ratio is too high.” Some credit performance changes may be a result of vehicle prices, consumers making smaller down payments or more negative equity in vehicles, Chiappone said, noting that with ongoing affordability headwinds, consumer options are limited. “It might be a reset of expectations on what type of vehicle that you’re looking for. No consumer likes to … have to go down to the entry model ... But that might just be the reality right now, with a lot of the new tech and the things that are driving prices up.” — Daniel Chiappone, Space Coast Credit Union The volume of surveyed respondents who applied for auto loans landed at 12.8% of survey respondents in October, down from 11.7% in October 2024 and 13.5% in June, the most recent survey, according to the Fed. The rate of respondents who believed their auto credit application would be rejected fell to 29.2% in October, down from 30.1% in October 2024 and 30.6% in June, according to the survey. The increase in rejections came as consumers’ “current financial situations compared to a year ago worsened,” according to the Fed. Meanwhile, the expected applicant volume rose in October. The volume of people who indicated they may apply for an auto loan in the next 12 months landed at 11.2% in October, compared with 10.7% in October 2024 and 10.5% in June, according to the survey. Increased auto finance rejections come as the average price of a new vehicle hit $55,145 on Dec. 1, up 8.7% YoY, according to Big Wheels Average Vehicle Price Trends data. The average new-vehicle price was $52,821 at the start of October. Average Vehicle Price Trends

[caption id="attachment_58357356" align="alignnone" width="1920"] (Courtesy/Big Wheels)[/caption] —Additional reporting by Amanda Harris

Auto rejections reach second-highest rate recorded in October (Big Wheels)

Rejection rate climbed to 15.2%

OEMs see EV sales plummet in November, ICE ticks down

Podcast: EV sales slow in November, used-vehicle values flat

Related Posts

Better credit access, application volume boost industry performance (Big Wheels)

Auto stocks up 4% through Black Friday (Big Wheels)

Used-vehicle values climb 1% (Big Wheels)

Rising sales, improved stock performance, demand contribute to 14% rise in industry performance (Big Wheels)

Podcast: EV sales slow in November, used-vehicle values flat

Stay Informed with Our Newsletters

The Roadmap Podcast

Retrieve your password