There is finally some good news on the credit front. Experts believe that low-interest car loans will be easier to find this year. Interest rates for vehicle loans are now at record lows.
The average rate is nearly one percentage point less than it was just one year ago. With used cars retaining more of their value, leasing deals should also become more attractive.
During third quarter 2011, new vehicle financing to borrowers with FICO scores under 680 increased by 14.8 percent compared to third quarter 2010.
Car financing is not where it was before the auto market crash but it is improving. From January through September 2011, 14.7 million auto loans were issued for new and used cars.
This figure was 13 million during this period in 2010 and just 11.7 million for the same period in 2009. The average U.S. financing rate for a new car is 5.3 percent, reports Bankrate. A year ago, this rate was 6.21 percent.
New and used car buyers should comparison shop for loans because they can find interest rates under three percent from credit unions and banks.
Consumers with poor credit will not be so lucky. Bad credit auto financing rates are currently about 12 to 15 percent. Individuals with subprime credit are expected to make a down payment of at least several thousand dollars.
However, the most credit-impaired are no longer being turned away. Even with a foreclosure, people can find new car loans if they have a good payment history, steady employment, and make a down payment.
Kelley Blue Book senior market analyst Alec Gutierrez stated that for most car buyers, financing will be “very, very affordable.”
