Consumer Car Buying Advice Blog

The latest quarterly report from TransUnion shows the year over year delinquency rate for all car loans rose in the third quarter of this year while we determine what this might mean for bad credit car loan buyers

TransUnion

The latest market trends analysis from TransUnion, one of the three major credit bureaus, is culled from a huge database that represents approximately 10% of what it terms “credit active” consumers here in the U.S. As such, it’s fair to assume that the results are relatively accurate.

Without boring you with the details, we’ll go straight to TransUnion’s analysis of what all the statistics mean.

Analysis

“The rise in the third quarter 60-day auto delinquency rate is more indicative of a cyclical pattern since the current automotive lending environment has remained consistent in its approach over the last 12 months,” said Peter Turek, automotive vice president in TransUnion’s financial services group. “On a state-level basis, 7 states experienced a drop in their quarter-to-quarter delinquency rates while 22 showed a drop on a year-over-year basis. The drop in delinquency is an indicator that some states could emerge from the recession sooner than others.”

“As in recent quarters, both the availability of funding in the market, consumer demand for auto financing and tighter lending standards have contributed to a significant decrease in the number of auto loans in the market, resulting in upward pressure on delinquency rates. As well, the drop in average auto loan debt, although marginal at the national level, reflects the maturation of existing loans and the corresponding decreases in new auto loan originations in the third quarter,” continued Turek.

How bad credit auto loans are affected

The bottom line is that fewer new auto loans are being made and that those loans are being subject to tighter lending standards. When compared with the car loan market two years ago, someone with a given FICO score will be paying a higher interest rate and will be asked to put down a larger down payment in the current credit market.

At Auto Credit Express, our advice to consumers seeking bad credit car loans hasn’t changed since the beginning of the financial crisis:

• Know your credit score and what’s contained in your credit report
• Plan on coming into the loan with at least 10 percent down in cash or trade equity
• Keep the loan term as short as possible
• Buy a compact of midsize vehicle and put off looking at your dream car until after you’ve reestablished your credit.

We’re here to help you

For nearly 20 years, Auto Credit Express has been helping people with credit problems get approved for new and used car loans. Our affiliate dealers work with the leading subprime lenders to get you approved. Since our inception, we have processed over 1,000,000 online bad credit auto loans and closed over 1 Billion dollars in auto loans.

For more information, please visit www.autocreditexpress.com to see what we can do for you.

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