More information from the latest Experian Automotive quarterly report notes that car loans to all consumers including those with damaged credit are becoming more accessible
Car buyers suffering from poor credit that rely on auto loans should be cheered by additional information found in the latest quarterly report from Experian Automotive.
Here at Auto Credit Express we see the latest statistics as even more encouraging news for bad credit buyers and we should know because for over two decades we’ve been helping these consumers that are looking for online auto loans find those dealers that can offer them real opportunities for auto loan approvals.
Even before beginning the process many of these applicants ask us, “How hard is it to get approved for an auto loan?” The fact is that while each situation is different the odds of receiving an approval also depend on the lending climate – something that’s monitored constantly with findings reported every three months by Experian Automotive.
Experian Automotive report
An update on their second quarter results that was published September 3, 2013 begins by stating that “consumers are relying on automotive financing more than ever before.”
It then goes on to state that “a record 84.5 percent of consumers who acquired a new vehicle in the second quarter obtained either a loan or a lease to fund the purchase.”
The report also noted that “new vehicle financing is at the highest level since tracking began in 2006. This metric is up from 82.5 percent in Q2 2012 and from 79.7 percent prior to the recession in Q2 2008.”
Here is Experian’s take on the results:
“Loans have become more accessible in recent years, and we’ve seen a steady growth in the percentage of consumers financing their vehicles,” said Melinda Zabritski, senior director of automotive credit for Experian Automotive. “Obviously, this is good news for the auto industry, but it’s also good for consumers because this, combined with the reduction we have seen in delinquencies, shows that they are feeling more confident in their ability to take on more debt and pay it off in a timely manner.”
High risk car loans
The report also contained more good news for borrowers with problem credit under the heading “Subprime loans continue to gain market share.”
In this section, the report went on to state that “Nonprime, subprime and deep-subprime new vehicle loans increased to 27.45 percent market share in Q2 2013, up from 25.41 percent in Q2 2012. For used vehicles, nonprime, subprime and deep-subprime loans accounted for 57.31 percent market share in Q2 2013, up from 56.46 percent in Q2 2012.”
With this in mind, car shoppers with poor credit should consider these tips:
• Know what’s in your credit reports as well as your credit scores.
• Choose an affordable small or mid-sized car and with a payment that is no more than 10% to 15% of your gross monthly income (the lower the better).
• With lenders continuing to be cautious while looking for lower LTV ratios, the higher your down payment, the better it will look. Not including new car rebates or dealer cash, a down payment of 15% or more will increase your chances of an approval.
The Bottom Line
It’s always a good sign for borrowers with damaged credit when lenders are increasingly willing to work with them. But at the same time we should point out that these high-risk lenders continue to insist that buyers come into a loan with some type of investment (cash down, trade equity) in these loans.
We also have one more tip for borrowers with credit issues: if you’ve been turned down for a conventional car loan, it doesn’t mean the only option is a tote the note car dealer. That’s because Auto Credit Express matches applicants that have experienced car credit issues with dealers that can offer them their best chances for approved auto loans.
So if you’re ready to establish your auto credit, you can begin now by filling out our online auto loan application.
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