Critical Shifts:
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Historic Highs in Credit Access: The Dealertrack Credit Availability Index climbed to 104.6 in June 2026—its highest mark since December 2015. This represents a 7.3% year-over-year surge and the fifth consecutive month of growth.
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The Power of Approval Rates: The primary driver of this growth was a massive spike in overall loan approvals, which jumped to 73.8% (up 170 basis points from May). This is the single largest monthly approval gain recorded in 2026.
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Stretching terms to make deals work: A new record was set as 31.1% of loans exceeded a 72-month term. Lenders and buyers are increasingly turning to ultra-long loan durations to combat high costs, which serves as a major index driver but introduces potential long-term risk.
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Persistent Risk Factors: While negative equity dropped slightly for the third straight month (down to 56.7%), it remains incredibly high. Over 56% of borrowers are starting their new auto loans already "underwater" (owing more than the vehicle is worth).
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Uneven Channel Growth: Credit eased most aggressively for used vehicles, particularly at Independent Used channels (+2.2%). Conversely, non-captive new vehicle channels actually saw credit tighten slightly (-0.5%).
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In June 2026, the Dealertrack Credit Availability Index rose to 104.6, its highest level in more than a decade. The All-Loans Index increased 0.9% from May’s 103.6, marking its fifth consecutive monthly increase, and a rise of 7.3% from June 2025.
The monthly gain was driven primarily by a sharp improvement in approval rates and a continued uptick in long-term loan share, with a modest widening in the yield spread. A further pullback in subprime share only partially offset those gains.
The overall loan approval rate rose to 73.8% in June, up 170 bps from May, marking the largest monthly gain of 2026. Year over year, the rate is up 150 bps. The significant jump made approval rates the single largest contributor to June’s index gain.
The share of loans to subprime borrowers declined 10 bps month over month, to 16.6%, the third consecutive monthly decline following March’s surge to 19.5%. Despite three months of pullback, subprime share remains up 250 bps year over year, reflecting conditions that are still more positive for higher-risk borrowers than a year ago. The yield spread widened 5 bps (from 6.72% to 6.77%), doing little to reverse May’s sharp 53 bps narrowing. The average contract rate rose 11 bps to 10.98.
- Loan Term Length: The share of loans with terms greater than 72 months reached 31.1% in June, a new all-time high in the dataset and up 110 bps from May. The increase suggests lenders and consumers continue to stretch loan length to make deals work. Long-term loan share was the second-largest contributor to June’s index gain. Year over year, the share is up 410 bps from 27% in June 2025.
- Negative Equity Share: The share of loans with negative equity declined 30 bps, from 57%, the third consecutive monthly decline following March’s record high of 59.2%. Despite the monthly easing, negative equity remains up 220 bps year over, with most borrowers starting their new loan with a balance that already exceeds their vehicle’s value.
- Down Payment Percentage: Down payments declined 30 bps to 13.2%, after ticking up slightly in May, consistent with the largely flat trend seen throughout 2026. Down payment percentage is now running below year-ago levels of 13.7%.
- Channels: Credit access improved unevenly by channel in June. Independent Used posted the largest monthly gain, up 2.2%, followed by All Used, up 1.3%, and Used CPO, up 0.3%. Franchise Used and All New were roughly flat on the month, while Non-Captive New declined 0.5%, the only channel to lose ground.
- Lender Types: All four lender types posted gains in June. Captives rose 1.8% and Finance Companies rose 1.6%, the largest monthly gains, followed by Credit Unions, up 0.7%, and Banks, up 0.2%.
The June 2026 Dealertrack Credit Availability Index closed at 104.6, its highest level since December 2015, marking a fifth straight monthly increase. The advance was driven primarily by a sharp recovery in approval rates coupled with a new all-time high in long-term loan share. Modest widening in yield spread and a continued pullback in subprime lending served as primary offsets to index growth. Extended loan terms at a new all-time high and elevated negative equity continue to present risk potential as the index improves.
