Getting car loans has become easier. Easier car loans benefit subprime borrowers at a time when more Americans than ever have low credit scores. More cars could be sold with this credit market. Because low credit buyers can buy more cars, auto lenders will benefit also. Also, more cars being sold mean a recovering economy. Article source – Car loans getting easier for people with low credit scores by Car Deal Expert.
Poor credit, still get car loans
Auto markets expand their cars when they credit market is making loans. The Associated Press tells us that car buyers with bad credit can get auto car loans nevertheless. 60 percent of people under a 620 credit score could get auto loans within the past. 5 percent was the going rate for the last year. Now it is at a whopping 9 percent. Subprime borrowers nevertheless need to make a bigger down payment and will pay more interest, but car buyers with a bad credit score make up a big chunk of the market.
Interest rates for car loans diving
The Associated Press reports that those with great credit in the first quarter of 2010 made up 17 percent of auto loans for bad credit. Rather than getting new cars with loans, 53 percent got used cars. 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.
All buyers welcomed by auto makers needing to sell
Americans have seen their credit fall drastically. Below 599 in credit is now, as outlined by FICO Inc., 25.5 percent, 43 million of people. 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. GM needs to reach buyers with weaker credit scores because they make up a larger portion of its customers than some of its competitors.
Subprime 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. 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 has gone up to 8,000 dealers from the 4500 it worked with just a year ago.
Wall Street Journal