Buying a car can be quite difficult for those who do not have the best of credit. However, recent reports show that car loan rates are lower than last year, and it is becoming easier for those with so-so credit to get a loan, according to The Detroit Free Press.
Car loan rates are around 3 percent for used and new cars, which is very promising for those who are in the market for a new vehicle.
Before the recession hit, it didn’t matter much what a person’s credit score was, as they were still able to get a loan. However, once the economy took a turn for the worse, prospective buyers had to have excellent credit to get approved. Now, there is more of balance, making it easier to get car loans.
According to Experian, the average credit scores on new car loans were 755 in the third quarter of 2012. This is down slightly from the very high 775 that were recorded in the same quarter in 2009, the media outlet reports. This shows that having perfect credit is no longer key to getting a car loan.
“Lenders are certainly making loans available,” Experian’s director of automotive credit, Melinda Zabritski, told the news source. “Consumers are doing a very good job of paying their auto loans.”
In addition, lenders are taking those crucial extra minutes to look at a person’s history before denying or approving a loan, which is key for those who have less-than-stellar credit, the media outlet reports.
When it comes to getting an auto loan, one of the most important things is to go through a third party lender. It is beneficial for a prospective buyer to get their financing taken care of prior to going to the dealership for a number of reasons. First of all, putting financing in a dealer’s hands can leave a buyer with a higher monthly payment or interest rate than they could find elsewhere. A dealer is a salesman for a reason, and a buyer doesn’t want to end up with a monthly payment that is much higher than they can afford.
In addition, the buyer will most likely be less stressed because they will only have to worry about negotiating the car price, and be less likely to feel uneasy about their purchase after the fact.