It is good news knowing that it is easier to get car loans now. Those with low credit scores could not be happier to see that they can nevertheless get car loans. A looser car credit market helps the auto industry sell more cars. Because low credit buyers can buy more cars, auto lenders will benefit also. Not to mention, the US economy could really use the sale of more cars.
A bad credit score, still get car loans
Signs of life let auto lenders expand their products. The Associated Press explains that loans are now available to those who want cars but do not have the credit for it. Typically, those with scores below 620 only get approved 60 percent of the time. 5 percent was the going rate for the last year. Now it is at a whopping 9 percent. A huge part of the market includes those with poor credit although they have to pay bigger down payments and will end up with more interest payments.
Car loan interest rates falling
The Associated Press reports that those with great credit within the first quarter of 2010 made up 17 percent of auto loans for people with bad credit. Subprime borrowers took out 53 percent of the loans for used cars, as outlined by the credit reporting agency Experian. Because interest rates are dropping, this rate might increase. The average rate of interest for a four-year car loan this month is 6.3 percent, down from 7.2 percent a year ago, as outlined by Bankrate.com.
All buyers welcomed by auto makers needing to sell
Credit scores fell for all Americans within the country. 43 million people are shown by FICO Inc. to have credit scores below 599. Subprime lending comes with higher default rates, which hurt the auto lending industry during the economic meltdown. The But the Wall Street Journal reports that GM wants risky buyers now. Those with poor credit have to buy cars since they, historically, have made up most of the cars being bought from GM.
Lower rate auto lending doing great
To be able to get these loans to buy cars with low credit, GM had to make a special deal with AmeriCredit Corp. GM is making it easier for individuals to purchase their cars with this by intentionally losing just a little money with each sale. Americredit Corp. is one of the largest subprime auto lenders. The business has gone up to 8,000 dealers from the 4500 it worked with just a year ago.
Associated Press
google.com/hostednews/ap/article/ALeqM5gCH7uRdNTEXaUCoNUPeukZZi3qDwD9H22DQ00
Bankrate.com
bankrate.com/
Wall Street Journal
