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Get a Car on Finance with Questionable Credit

The good news for car buyers with questionable credit can be found in the latest report from Equifax that shows auto loan delinquency rates continue to decline
Get a Car on Finance with Questionable Credit
Lending news

Car shoppers with problem credit will find some good news in the most recent data from Equifax if they’re contemplating applying for an auto loan in the near future.

At least that’s our take here at Auto Credit Express where we’ve spent the last two decades helping car buyers with poor credit searching for online car loans find those new car dealers that can give them their best opportunities for car loan approvals.

This experience has also shown us that it’s important that credit-challenged shoppers understand the current lending climate – something reflected in the latest lending report.

National Consumer Credit Trends Report

On May 29th, in a press titled “New Credit for Auto Loans Currently at Highest Level in Eight Years,” Equifax reported that “As of April 2013, total outstanding balances on loans funded by auto finance companies are $416.9 billion, a 50-month high. The total number of outstanding loans is more than 31 million, a 46-month high.” In addition, “Serious delinquencies on auto loans funded by finance companies fell to 1.75% of outstanding balances, a decline of 11.7% from March’s rate and 15.4% from April 2012’s level.

For credit-challenged consumers this is good news as it should be pointed out that finance companies are the primary lenders to people with bad credit.

“Sales of new cars and light trucks hit a 5-year high in the first quarter on a seasonally adjusted basis, and consumers’ demand for auto loans is similarly strong,” said Equifax Chief Economist Amy Crews Cutts. Ms. Cutts also noted that “…low delinquency rates are allowing lenders to make credit a bit more easily available.”

While this is good news for car buyers with less than perfect credit, these consumers still need to understand a couple of important points:

• While high-risk lending continues to improve and interest rates from subprime auto lenders are lower than in recent years, nearly all of them are still asking for down payments of 10% or $1,000 (whichever is less) in cash or real trade equity.

• With more buyers than ever with weak FICO scores in the market, subprime lenders can be very selective during the approval process.

With that in mind, applicants should follow these tips:

• Know the information in your credit reports and at least one of your credit scores.

• Choose an affordable vehicle with a monthly payment that’s, at most, 10% to 15% of your gross monthly income (the lower the better).

• High-risk lenders love equity so the higher the down payment, the better. Not including rebates or dealer cash, 15% or more will typically increase the chances of an approval.

As we see it

Car loan applicants with questionable credit should be aware of the general lending climate.

Having said that, if you’re someone who’s been turned down for a conventional car loan it doesn’t mean the only remaining choice is a BHPH car dealer. We want you to know that, at no charge to applicants, Auto Credit Express matches people that have experienced car credit difficulties with select new car dealers that can offer them their best chances at approved car loans.

So if you’re ready to reestablish your auto credit, you can begin now by filling out our online car loan application.

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