Auto Lenders Are Declining More Loans
Have you noticed an uptick in the number of people being denied financing at your dealership?
If so, you are not alone. A new report from the Federal Reserve shows the rejection rate for auto loans is at an all-time high.
Here’s what we know about the situation as it stands:
- Rejection Rate: The Fed says the overall rejection rate for auto loans currently stands at around 14.2 percent. In the ten years the Fed has been tracking loan rejections, this figure has never been higher.
- The Cause: The Fed says the elevated rejection rate is being caused by inflation and a notable increase in delinquencies and defaults.
- The Future: The Fed expects things to get worse before they get better. Its report says the probability that an applicant will be rejected for a car loan in the next twelve months is nearly 31 percent.
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