It is good news knowing that it is easier to get car loans now. Car loans will help many who have low credit scores and no way out. More cars will be sold with this credit market. Because low credit buyers can buy more cars, auto lenders will benefit also. And selling more cars is good for a U.S. economic recovery that is trying to gain momentum.
Car loans for poor credit more available
Signs of life let auto lenders expand their products. The Associated Press reports that car buyers with low credit scores are getting a break. Historically, the approval rate for subprime borrowers — those with scores below 620 — ran about 60 percent. 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 a bad credit score although they need 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 loan financing. Subprime borrowers took out 53 percent of the loans for used cars, according to the credit reporting agency Experian. Because interest rates are dropping, this rate might increase. In the last year, Bankrate.com explains, interest rates dropped from 7.2 percent to 6.3 percent on 4 year auto loans.
All buyers welcomed by auto makers needing to sell
Americans have seen their credit fall drastically. 43 million individuals are shown by FICO Inc. to have credit scores below 599. Higher default rates came with subprime lending which hurt the economy bad. The But the Wall Street Journal reports that GM wants risky buyers now. Most consumers are those that have lower credit scores with is why GM wants them now.
Great auto lending
AmeriCredit Corp made a deal with GM to help individuals get loans with bad credit. GM gives more competitive rates because they’re reducing the cost of borrowing to encourage people to buy from them. Americredit Corp. is a huge subprime auto lender. The company expanded the number of auto dealers it works with to more than 8,000 in the first quarter of this year, up from 4,500 a year ago.
Associated Press
google.com/hostednews/ap/article/ALeqM5gCH7uRdNTEXaUCoNUPeukZZi3qDwD9H22DQ00
Bankrate.com
bankrate.com/
Wall Street Journal
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