Auto Loan Denials Surge as Lenders Tighten Credit

Access to auto loans continues to decline as lenders tighten credit standards due to economic uncertainty and rising delinquencies. According to the New York Fed, the denial rate for auto loans reached 14.2% in June 2023, the highest since 2017. Higher interest rates, inflation, and increased risk aversion among lenders are contributing to the reduced availability of credit, particularly affecting subprime borrowers. As a result, fewer consumers are able to secure financing for vehicle purchases, potentially impacting the auto market and the broader economy.