Standards for auto loans has decreased, reports Automotive News. Interest rates and repayment period have also improved in favor of the consumer.
Helping subprime consumers out
Part of Experian Plc is Experian Automotive. It did a report showing an increase in subprime automotive loans by 11.4 percent over the quarter compared with the quarter from the last year. More people are able to get loans with subprime credit, and they are even seeing lower interest rates and longer repayment periods.
Experian explained that there were also fewer automobile repossessions and late payments in the first quarter.
Selling the best automobiles
There are negative and positive things associated with credit easing. Bank losses can take place when there is too much aggressive lending as default becomes more common. On the other hand, the United States economy does better when there are more opportunities for potential buyers. This will even boosts auto sales, which helps the dealerships.
More automotive loans are still wanted by credit skilled professionals though.
"This thawing of the credit pipeline has been good for everyone, from consumers to lenders to automotive retailers," said Melinda Zabritiski, Experian's director of automotive credit.
The competition among auto lenders is a definite sign of industry recovery, Zabritiski indicated.
Cars loans aren't so explosive
For banks, it is recognized as a safer investment to work with bad credit on auto loans since it is a priority for many people to have a running car they can use to get to and from work. The typical credit score for used car buyers was 659, a four point drop in the first quarter, according to Experian. It also noted that the number dropped six points to 760 for the average credit rating for consumers getting a new car. Anything that is considered subprime is a score of 680 or less.
There was an increase in the average car loan for automobiles in this period to $17,050, a $411 increase. There was also a rise in the typical amount spent on a new car to $25,995, a $589 increase.
During this time, there was a 0.27 point decrease in the typical brand new car loan interest rate to 4.56 percent. It also decreased for used automobiles to 9.02 percent, a 0.06 percent decrease. Automotive News explained that there was a rise in payments for new and used automobiles, but only by $3 overall. There was a one month decrease in the amount of time people got loans for to 59 months for used automobiles and 64 months for brand new vehicles.
Helping subprime consumers out
Part of Experian Plc is Experian Automotive. It did a report showing an increase in subprime automotive loans by 11.4 percent over the quarter compared with the quarter from the last year. More people are able to get loans with subprime credit, and they are even seeing lower interest rates and longer repayment periods.
Experian explained that there were also fewer automobile repossessions and late payments in the first quarter.
Selling the best automobiles
There are negative and positive things associated with credit easing. Bank losses can take place when there is too much aggressive lending as default becomes more common. On the other hand, the United States economy does better when there are more opportunities for potential buyers. This will even boosts auto sales, which helps the dealerships.
More automotive loans are still wanted by credit skilled professionals though.
"This thawing of the credit pipeline has been good for everyone, from consumers to lenders to automotive retailers," said Melinda Zabritiski, Experian's director of automotive credit.
The competition among auto lenders is a definite sign of industry recovery, Zabritiski indicated.
Cars loans aren't so explosive
For banks, it is recognized as a safer investment to work with bad credit on auto loans since it is a priority for many people to have a running car they can use to get to and from work. The typical credit score for used car buyers was 659, a four point drop in the first quarter, according to Experian. It also noted that the number dropped six points to 760 for the average credit rating for consumers getting a new car. Anything that is considered subprime is a score of 680 or less.
There was an increase in the average car loan for automobiles in this period to $17,050, a $411 increase. There was also a rise in the typical amount spent on a new car to $25,995, a $589 increase.
During this time, there was a 0.27 point decrease in the typical brand new car loan interest rate to 4.56 percent. It also decreased for used automobiles to 9.02 percent, a 0.06 percent decrease. Automotive News explained that there was a rise in payments for new and used automobiles, but only by $3 overall. There was a one month decrease in the amount of time people got loans for to 59 months for used automobiles and 64 months for brand new vehicles.
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