With dealer lots starting to fill back up with product after years of lean inventories that encouraged salespeople to ask for absolutely ludicrous prices, the Federal Reserve has found that lenders are declining would-be borrowers at a record-setting pace.
The reasons for this are many. Annual percentage rates have come up, requiring consumers to pay more money over time that lenders just aren’t certain they’ll see a return on. More people are also defaulting on loans across the board and inflationary pressures are poised to make the issue worse since the dollar just doesn’t go as far as it used to.
Based on new data released by the Federal Reserve shared by Car and Driver, auto loans rejections averaged 14.2 percent in June up from 9.1 percent in February. That’s a staggering increase in just a few months and the highest level since the Fed started collecting the relevant data in 2013. Though the report does showcase that vehicle-related loan rejections were actually a little lower than the 21.8 percent rejection rate average for all U.S. loans.
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