Buyers who need a second chance auto loan are in for a treat. More lenders are entering the subprime market. The more intense competition is edging interest rates lower for all credit scores, while loosening lending standards.
Experian Automotive’s director of automotive credit, Melinda Zabritski, had this to say, ”If you talk to some of the lenders, they say some of the larger subprime lenders are buying deeper, putting out more competitive rates. That pushes the bigger lenders to do the same.” Zabritski went on to mention several positive trends within the automotive lending market.
- Delinquencies and repossessions were down
- The average amount financed increased for new and used vehicles alike.
- Leasing is holding steady, but is up by ten percentage points over the 2009 level.
- Subprime loans made up 21.9% of all new-vehicle loans and 51.6% of used car loans.
- The average interest rate new car loans was 4.55% in the third quarter and 8.6% on used car loans.
Getting a second chance auto loan may not allow you to qualify for the rate mentioned above, but as the national average rate dips, so does the subprime rate for all credit scores. Combine falling interest rates and looser lending standards with year-end sales and you may be able to get the best possible deal on the vehicle that you need right now.