Credit challenged car buyers should be aware of the latest report from Manheim that shows supplies of used cars are increasing while prices are dropping
Good Time to Buy A Used Car
At Auto Credit Express we know that most borrowers with credit issues will choose a used car for their subprime loan because they're more affordable. It's a decision that makes a lot of sense even for people not in the market for poor credit auto loans, with the average new car cost rising every year.
It's a decision that makes even more sense when you consider the latest report from Manheim, the highest volume operator of wholesale car auctions in the U.S.
August Manheim Used Vehicle Value Index
According to Manheim, wholesale used car prices (adjusted for the type of vehicle as well as mileage and the time of year) fell last month. The decline in values for August marked the fourth straight monthly decline making now a pretty good time to buy a used car. August vehicle values were also down year over year – 0.4% from August of 2013.
Manheim believes the recent downward trend in wholesale pricing is the result of:
- A return to normal price levels after an extended time in which used car values were exceptionally strong
- An increase in the supply of wholesale used cars
- A drop in the demand for used cars
Time to Buy a Used Car
With used car prices moderating, now might be a very good time to take advantage of more affordable prices. Here are some further tips for our readers with troubled credit:
- Choose a subcompact, compact or midsize sedan. Not only are these vehicles affordable, the associated insurance and fuel costs are also more reasonable than trucks, vans or SUVs.
- Check the vehicle's history report to make sure it's clean. If it is, pay to have it inspected by either an inspection company or an ASE Certified Master Mechanic as well as a body and frame specialist
- For those looking at a second chance auto loan, keep the loan term as short as possible to reduce interest expenses. In addition, as your credit situation improves, you'll be able to trade out and into a new loan with a lower interest rate that much sooner.
The Bottom Line
With used car prices moderating, buyers with less than perfect credit have a great opportunity to reduce the overall expenses of a subprime auto loan. Consumers can accomplish this by choosing an affordable vehicle as well as a loan term that allows them to trade out as soon as their credit situation improves.
Here's another tip: Auto Credit Express specializes in placing applicants with past credit problems with dealers that can give them their best chances for auto loan approvals.
So if you really want to get your car credit back on track, you can start that process now by filling out our online car loan application.