CNW: Auto Loan Approvals Climb in December
BANDON, Ore. — Early data from CNW Research indicates that auto loan approvals began to rebound in December after plummeting in October.
"This marks the second month that auto lenders seem to have loosened the purse strings a bit," explained Art Spinella, of CNW. "While not a massive gain, it does portend a slightly better outlook for the auto industry.
More specifically, approvals on prime auto loans began the year at 88.4 percent in January then dropped to a low of 77.4 percent in October. These approvals inched up to 83.92 percent by December.
Near-prime auto loan approvals started at 85.4 percent in January and declined to a low point of 73.7 percent in October. But as of December, this figure was at 76.84 percent.
Reviewing subprime approvals, CNW discovered that these kicked off at 58.2 percent in January and plummeted to 14.3 percent in October. By December, subprime approvals stood at 16.86 percent.
"Our data as reported includes conditional approvals. We will begin breaking out the conditional approvals beginning with January data," Spinella pointed out to SubPrime Auto Finance News.
As for floor traffic, Spinella noted that it continues to be down.
However, he said, "But this, too, can be expected to inch upward slowly over the coming few months. With higher floor traffic and improved loan approval rates, the industry may well have hit bottom on these two fronts, especially among the 900,000 people who postponed a vehicle acquisition in 2008."
On the other hand, he cautioned, "I don't want to read too much into the data. It's way too early to do that. And nothing indicates a return of a 16- or even 15-million-unit year in 2009, but after a year of bad news here are two bits that are glimmers."
CNW classifies prime as 750 and above, meanwhile near-prime is 620 to 749. Finally, subprime comes in at 620 and below.
Breakdown of approval rates: