While the sub prime mortgage crises has affected all parts of the economy, there are differences when it applies to the sub prime car loan lenders…

The difference between the car market and the housing market

It’s no secret that during the past ten years mortgage lenders in the housing industry – especially the subprime lenders – placed high risk customers in adjustable rate mortgages that were dependent upon the prime rate staying low and the housing market continuing its appreciation. When both these scenarios blew up, the number of housing foreclosures skyrocketed.

Subprime auto lenders, on the other hand, continued to insist on income verification and strict debt to income ratios.

What does this mean for auto borrowers?

While subprime auto lenders were generally not as reckless as mortgage lenders, there has been a “cascading effect” to auto loans. As borrowers get into financial trouble over home loans, the tightening of credit has caused a rise in repossessions and late payments for both conventional loans and bad credit loans. The result will be a tightening of credit for both conventional and subprime auto loans.

The Bottom Line

With subprime lenders tightening their guidelines, it’s more important than ever that you apply for your bad credit auto loan with a company that knows the business. Here at Auto Credit Express, we have helped thousands of people with bad credit drive away from one of our affiliate dealers in a reliable, low mileage used or new car. At the same time, these customers are helping to reestablish good credit. Go to our web site at www.autocreditexpress.com and check us out. If you have any questions after checking out our auto loan calculator, you can contact us during normal business hours at our toll free number listed on every page. Here at Auto Credit Express, we want you “on the road” to better credit!