A new survey shows that dealers are growing more and more friendly to the subprime auto loan market while banks and other major lenders are withdrawing from it.
A new report from Equifax has shown that this year dealers are in the
business of lending but banks are not quite so interested. Dealers this
year have shown that they are willing to give loans to increasingly
high risk customers, including customers with lower credit scores.
Dealerships are more and more prepared to give new customers a second
chance, and let them know that they have options with their finances.
In
contrast, banks, credit unions, and other major lenders who do not
specialize directly in auto loans are starting to close their doors to
those with low credit scores more and more this year. Banks are looking
for higher credit scores before they are willing to give out loans, and
if they actually do give out a loan, Equifax is reporting that those
loans have higher interest rates on average than the loans given by auto
loan specific lenders.
Some speculate that this change in trends
is because auto lenders are recognizing the value of the subprime
market. Due to the troubled economy, so many people have moved into this
category because of circumstances
that were beyond their control and auto lenders are looking to help
these Americans get back on their feet by lending to them when they are
in need and helping to build their credit with auto loans that they can
afford.
Jessica Harmon is a staff writer for Scott McCorkle's Credit Capitol. If you would like more information about how we can help you with an auto loan, please visit our website!
