Buyers hoping to finance their next vehicle with bad credit auto loans should be in better shape this year if you take into account the latest PRMIA bankers survey

Bad credit and car loans

If you have bad credit and you're wondering what your chances are of getting approved for any of the bad credit car loans out there, you might want to read on. We know, because for over two decades Auto Credit Express has been working with credit-challenged car buyers establish their auto credit.

During that time, we've personally helped hundreds of retail car buyers qualify for a bad credit auto loan while helping them avoid a tote the note dealer (buyers outside our retail area can now fill out a bad credit auto loan application on our web site). We also walk them through the bad credit auto loan process (buyers who don't understand it can end up in repossession).

But like most financing, bad credit auto loans have been impacted by a lack of funding over the past three years. Recently, however, there was some good news from a survey of bankers that was sponsored by FICO

PRMIA survey

In a recent survey of 216 bankers and risk analysts sponsored by FICO, the Professional Risk Managers' International Association came up with the following results relating to car loans:

•    Most respondents feel that auto loan delinquencies will decrease or stay the same.

•    When asked about the level of auto loan delinquencies, most felt the level would decrease or stay the same (76.4%). This number is higher than ten months earlier, when only a little over half of respondents (56.2%) answered similarly.

•    A majority of respondents expect an increase in interest rates. Half of the respondents felt rates would increase somewhat (50.0%) with a small number (5.2%) expecting a large increase. Only 2.4% of individuals surveyed expected a small decrease. Interestingly, in November of 2010, 14.8% expected a decrease, while only 37.0% expected a small increase.

As we see it

While the lending landscape in the first quarter of 2011 is certainly an improvement over the past few years and things look much brighter than  in 2008, interest rates could begin to go up as the economy strengthens.

In any case, there are a number of things you can do to improve your chances of securing a bad credit car loan.

Your down payment

Set aside as much as you can for a cash down payment. Even with rebates, bad credit car lenders still look for owner equity in a loan.

Your trade in

Speaking of down payments, if you are upside down in a vehicle and plan on trading it in, be sure you have enough in the form of additional cash or a possible rebate to cover pretty much all of it. Even in the best of times, bad credit lenders do not like negative equity.

Debt to income

Be sure that you have enough income to make the monthly car and insurance payments – and that you can prove that income.

If you need help, there are calculators on our web site that will walk you through the process. Be aware that subprime lenders will ask for proof of this income from payroll check stubs and W-2 forms. This means that if you don't report all your income, you could be in trouble if your expenses are not in line your expenses.

The Bottom Line

Auto Credit Express has helped thousands of people with bad credit buy cars and reestablish their car credit through a nationwide network of affiliate dealers that specialize in second chance auto loans.

So if you are serious about getting your credit back on track, you can begin the process right now by filling out our secure online bad credit car loan application.