Getting car loans has become easier. Car loans will help many who have low credit scores and no way out. A looser car credit market helps the auto industry sell more cars. Auto lenders are happy with more cars being sold. Also, more cars being sold mean a recovering economy.
More car loans accessible
Auto lenders are expanding as the car credit market shows signs of life. The Associated Press explains that loans are now accessible to those who want cars but don’t have the credit for it. 60 percent of individuals under a 620 credit score could get automobile loans in the past. Last year, the rate fell to 5 percent. It has gotten up to 9 percent though. A huge part of the market consists of those with a bad credit score although they have to pay bigger down payments and will end up with more interest payments.
Interest rates for car loans falling
About 17 percent of all the auto loans with bad credit written for new car buyers within the first quarter of 2010 were to customers with subprime credit, the Associated Press article said. 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. Bankrate.com shows us that 7.2 percent dropped to 6.3 percent for interest rates on a four year car loan in just a year.
Auto makers need buyers with low credit scores
Credit scores fell for all Americans in the country. Figures provided by FICO Inc. show that 25.5 percent of consumers — about 43 million individuals — now have a credit score of 599 or below. Higher default rates came with subprime lending which hurt the economy bad. Buyers that are risky are wanted by GM now the But the Wall Street Journal reports. Those with poor credit have to purchase cars since they, historically, have made up the majority of the cars being bought from GM.
Lower rate auto lending doing great
To make more loans to people with low credit scores, GM made a deal with subprime auto lender AmeriCredit Corp. Under this arrangement GM augments the loans with cash incentives so it can offer more competitive rates. For subprime auto lending, Americredit Corp. is one of the biggest companies. The business expanded the number of auto dealers it works with to more than 8,000 within 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
