Auto lenders are opening the door wider than they have in over a decade, at the exact moment a near-record share of auto debt is sitting 90+ days past due. Both things are true at once, and nobody's fully explained the gap yet.
The Dealertrack credit availability index rose to 105 in July, up 6.9% year over year and near its loosest point in 11 years, according to Cox Automotive. At the same time, 5.5% of the nation's auto debt was at least 90 days behind on payments in the second quarter, the second-highest rate in the more than 20 years the New York Fed has tracked the number.
📊 Two Numbers Moving the Same Direction
Metric | July 2026 | July 2025 |
|---|---|---|
Credit availability index | 105 | 98.2 |
Approval rate | 74% | 74% |
Subprime share | 16.4% | 13.7% |
Yield spread | 6.6% | 6.9% |
Approval rates held steady while lenders competed harder on price, and subprime's share of auto loans climbed nearly 3 points. Loan write-offs, meanwhile, stayed flat at just 0.2%, the same rate as a year ago.
The Part Nobody's Fully Explained
Cox's Jonathan Gregory put a name to the disconnect: more borrowers are behind on payments, but fewer are actually defaulting than the historical pattern would predict. Before the pandemic, delinquency and default moved together closely. That relationship has loosened, and Cox hasn't pinned down why.
One theory Gregory raised: borrowers are stretched thin enough to rotate which bills they pay late, without giving up on paying altogether. They're behind with everyone, but not caught up with anyone in particular.
What Dealers Are Actually Seeing
They're going after it. It's a competition right now. It's good for us.
McCoy's read from the floor lines up with the national numbers. Subprime lenders in particular are competing hard for approvals, without pushing borrowers to state-maximum interest rates just to get deals done.
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A gap this wide doesn't stay open by accident, and it doesn't stay open forever either.
Lenders are betting that today's delinquent borrower is a slow payer, not a future default. That bet has held for several quarters running. It's also exactly the kind of assumption that looks obvious right up until the moment it stops being true. Worth watching whether write-offs start catching up to delinquencies, because when the market's this open, that's usually the switch that flips first.
