Credit for customers getting better
If you don’t have a perfect credit score and you want to buy a car, you are in luck…well in better shape now. Back in the day (well a few years back,) the approval rate for subprime borrowers (those with credit scores of below 620) was about 60%. Last year the approval rate for these guys was 5% and now it’s about 9%. Just a little more conservative in our loans these days.
Also, subprime borrowers have to put large down payments and their interest rates will be at least 10%. The thing is that the people with bad credit make up a huge portion of the auto sales market.
Looking for my good news? Well here it is. The numbers are getting better. More people are getting approved for loans with not great credit scores. If you try to get a loan from a local or regional bank they seem to be more relaxed in their loan approvals. Also, the average interest rate is down about a percentage point from last year at this time to 6.3% so that’s good news too.
Everyone in the auto market and elsewhere is still so unsure of our economy (with good reason.) The auto industry seems to be slowly but surely making its way up and out of its troubles, but financial companies still need to be careful when offering their car loans. It’s understandable, but still doesn’t make the guy happy that has a poor credit score get the car he always wanted, or any car for that matter. Best advice, get your credit score up and then go try to get a car loan. Good luck!