Consumer finance companies’ assessments of the current and prospective business environment improved significantly in Fourth Quarter 2024 according to the results of AFSA’s latest Consumer Credit Conditions Index Survey (C3 Survey). The full report will be released later this week.
Each quarter, survey respondents share their views on the current business situation, as well as their expectations for changes in the consumer-lending environment over the next six months, including consumer loan demand, lender funding costs, and loan performance. Survey participants include lenders offering traditional installment loans, vehicle financing and other types of consumer loans. The latest survey was conducted in the second half of January 2025.
The Fourth Quarter C3 Index survey reveals that lender expectations are consistently positive across all business indicators. Twice as many respondents reported that overall business conditions strengthened during the last three months of 2024 than reported conditions weakened. The Net Increasing Index (NII) – the percentage of lenders that reported conditions strengthened minus the percentage that reported conditions weakened – increased for the fourth consecutive quarter, reaching +21.4. The NII was a smaller +4.9 in the third quarter and was negative in the first half of the year. A negative reading indicates that more respondents claimed conditions weakened than reported them improved.
On balance, the outlook for the first half of 2025 was even brighter. The share of respondents expecting business conditions to improve over the next six months exceeded the share expecting conditions to weaken by a five-to-one margin. The NII of +50.0 was the highest in the four-quarter history of the survey, and was up from +18.9 in the third quarter.
The survey results are consistent with expectations for steady economic growth, a broadly healthy jobs market, further thawing in financial conditions, and a more transparent financial regulatory environment in 2025.
Review the last quarter’s survey here.
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