The latest FICO PRMIA bankers risk survey indicates that the availability of auto loans even for credit challenged car buyers should remain steady for the next six months

Car Loans with Poor Credit

Auto Loan Survey Reflects Caution

At Auto Credit Express we believe that if you have bad credit, you should know, overall, what your chances might be of getting approved for an auto loan. With that in mind, we present some information from the latest FICO/PRMIA survey.


As it has for the past four years a survey of risk managers at banks, conducted for FICO by the Professional Risk Managers' International Association (in collaboration with the Columbia Business School's Center for Decision Sciences), came up with the following results relating to car loans:

  • When asked about the level of auto loan delinquencies, most felt the level would stay the same (50.5%).
  • 69.3%, up from 64.8% in Q1, see the level of auto loan delinquencies staying the same or decreasing
  • 62.3% thought auto credit availability would meet demand
  • Just18.8% thought auto delinquencies would decline in the next six months, the second lowest level in the survey's history

"We've seen concerns about delinquencies creeping up for a few quarters," said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. "This can be interpreted as a healthy sign after lenders spent much of the past five years constricting credit availability and being risk-averse. These numbers mean more people are gaining access to credit, but we need to keep a close eye on the risk levels of these new loans. If delinquencies reach an uncomfortable level, we may see lenders pull back again."

What Problem Credit Borrowers Can Do

With concerns rising about auto loan delinquencies, there are a number of things potential borrowers with credit issues can do to better their chances for a loan approval including:

  • Down payment - Set aside as much as possible for a cash down payment. Even with rebates, subprime lenders still look for owner equity in a car loan.
  • Trade ins – Borrowers who are upside down in a vehicle they plan on trading in should have additional cash to cover the difference. Even in the best of times high-risk lenders don't like negative equity.
  • Income - Be sure to have enough additional income to cover the monthly car and insurance payments. Subprime lenders will ask for proof of income in the form of payroll check stubs and W-2 forms. Applicants who don't report all their income to the IRS could be in trouble if their expenses are not in line with their reported income.

For consumers who need help, our web site has calculators that can walk you through the process.

The Bottom Line

Although most bank risk managers surveyed see the current level of auto loan delinquencies remaining the same for thenext six months, very few see a decline. This indicates a level of caution as well as the possibility that car loans – especially to those with less than perfect credit – may become less readily available.

With that in mind we want to remind consumers that Auto Credit Express matches applicants with credit issues to those new car dealers that can offer them their best opportunities for approved auto loans even with poor credit.

So if you're ready to reestablish your car credit, you can start now by filling out rel="nofollow">our online auto loan application.