Access to credit is tightening — here’s what it means for your next auto loan

Access to credit for consumers is becoming more challenging, particularly for those with low credit scores. Subprime borrowers, those with scores of 699 or lower, are finding it increasingly difficult to secure auto loans. This is due to a combination of high vehicle prices, tariffs, and stricter lending standards. Used vehicle prices are also on the rise, and approvals for subprime borrowers have dropped since 2025.

Delinquencies on auto loans have increased to 1.47% in 2024, the highest since the Great Recession in 2009. Lenders are becoming more cautious, denying loans to subprime borrowers more often and increasing interest rates for all borrowers except those with excellent credit. To navigate this tight market, consumers with bad credit may want to explore options like credit unions, bad credit auto loans, or purchasing a used car privately.

Building credit and timing purchases around traditional holiday car sales may also help secure better deals.