If you have less than perfect credit and have been wanting to purchase a new or used car, this may be the ideal time to start shopping! According to an Experian Automotive report, the sales of new and used cars to customers getting subprime loans has increased.
Subprime loans to customers purchasing new cars increased during Q3. This puts these loans at 25% of loans for all new cars. Used car loans at subprime rates are on the rise, becoming over 54% of the loans made for used cars.
As the economy continues to change, consumers are becoming more willing to make large purchases. Lenders are willing to take on a little more risk by approving more subprime loans. The affect of all this is that the new and used car market is open to more consumers.
While the market is far off from where it was a few years ago, changes in lending trends are helping to get more people into new and used cars. The credit scores required for new and used car purchases are lower than this same time last year. There is also an increase in the amount of money approved for both new and used car loans.
Some of these increases are due to changes in spending habits. Late car loan payments and repossessions have both gone down. The goal of lenders is to move auto inventory and to do that they need customers. When there are reasons for lenders to be more positive about the market, they will extend the subprime loans to more people, generating more sales.
The availability of new and used cars to consumers with subprime credit is still influenced by the brand and model. For example, Lexus and Lincoln require a higher credit score to get you into a new car versus a Dodge or Chrysler product, which only require the lowest scores.
With a little research on brands and subprime lenders, this could be the time for you to show your consumer confidence by purchasing a new or used car.
Those looking at acquiring a new car may probably be concerned about their credit scores. This is because; one’s credit rating is an important factor that is considered during the loan approval process. With the current economic turbulence, it is only natural for many people to lag behind in paying some of their bills. Previously, a large percentage of the lenders would only approve car loans for those with very high credit scores of six hundred points and above. However, times have changed since the lenders are also dealing with business challenges such as increased competition and the adverse effects of the economic recession.
The interest rates on the car loans offered in the past were quite high. In this day and age, those who have a credit score of above four hundred and eighty usually get reasonable interest rates. There are several online lenders who are ready to approve car loans very promptly as long as the applicants meet the basic requirements. It is possible for one to get more than one offer from lenders who are ready to issue out these loans. However, do not be too quick to jump in to the first boat that comes along; take time to do some research. It is also worth mentioning that loan approval for people with bad credit is also possible today. Surprisingly, the approval process for such loans is also very fast.
Competition in the auto industry has compelled the players and stakeholders to work together in a bid to lower the average credit score needed for approval of a bad credit low interest loan. The lenders have reduced on the credit score expectations with the aim of making car loans accessible to more people.
It is very simple to identify a car loan lender online. This is because there are many sites that issue this service. However, one should ensure that he or she deals with a well renown company since there are those that are out to take advantage of innocent applicants.