Latest Experian report shows that new automotive account openings are increasing for bad credit auto loans
For people applying for terrible credit auto loans, Experian spelled out what's going on in last week's credit trends report.
We believe this should be good news for credit-challenged buyers because for close to twenty years we've been involved in bad credit auto sales here at Auto Credit Express.
The website we designed also explains the approved auto loans process so applicants can avoid a tote the note dealer as well as understand the issues that often lead to repossession.
Experian credit trends
But before applying for online auto loans it also helps to know what's going on with subprime auto finance and in last week's weekly report Experian had some good news for bad credit buyers.
According to their October 6th Credit Trends report, “Lenders continued to increase their appetite for risk in Q2 2011, with new vehicle loans for customers with credit outside of prime increasing by 22.4 percent compared with the previous year. In Q2 2011, 22.29 percent of all new vehicle loans went to customers in the nonprime, subprime and deep-subprime categories, increasing from 18.21 percent in Q2 2010."
What's even more encouraging for credit-challenged buyers is that “The largest percentage increase in new car loans was in the category with the highest risk: deep subprime, which jumped 44.1 percent, moving from 1.48 percent of all new vehicle loans in Q2 2010 to 2.13 percent in Q2 2011.”
Bad credit auto loans
What buyers with really bad credit need to keep in mind, however, is that the number of these kinds of loans took the worst hit during the economic crunch, so there's a good chance that loans of this type still haven't recovered to their pre-recession levels.
With that in mind, here are a few tips for bad credit buyers:
• Study your credit report, know the information it contains and be prepared to explain any negative entries on your loan application.
• Know your three FICO scores.
• Once approved, choose an affordable car with a monthly payment no more than 10% to 15% of your gross monthly income (the lower the better).
• Come prepared with a down payment in either cash or real trade equity (the higher the down payment the better your chances). Not including rebates or dealer cash, 15% or more will increase your chances of an approval for a bad credit car.
The Bottom Line
Even with improvements in subprime auto lending, there are still more people with bad credit than there are loans available, although if you've been turned down for a conventional car loan it doesn't mean the only alternative is a tote the note dealer.
At Auto Credit Express we help people with bad car credit find a dealer for their best chance at an approval for a bad credit car.
So if you're serious about getting your car credit back on track, you can begin the process now by filling out our online auto loans bad credit application.