ORLANDO, Florida, March 5, 2013 /PRNewswire/ --
With great relief and surprise, millions of Americans are discovering that borrowing money to buy a car is becoming significantly more straightforward.
Equifax calculates that new loans for automobile purchasing in the first quarter of 2012 topped $47.5 billion. These new awards were coupled by cheaper interest rates that allowed Americans with poor credit to access the necessary funds for buying cars.
Similarly, new data from Experian supports the upward trend of individuals with low credit scores successfully receiving car loans. Experian reports that the average person obtaining finance for a new car has a credit score of 760. This represents a decrease of six points from the previous quarterly figures. For used cars purchased with finance, the average credit score was down to a low of 659.
Financial analysts point to car finance specialist introduction services, such as LoansForPoorCredit.net, as fulfilling an urgent need for access vehicle loans in the "subprime" market. Although seeming paradoxical that auto loans are thriving in an economy where credit is bottlenecked, the Washington Post demonstrates how vehicle sales have peaked in the last 12 months as many individuals and families decide to invest in upgrading their older models instead of grappling with the volatile housing purchase market. The vehicle industry sole 7.3 million units in the first half of 2012, representing a 14.8% increase from the same time period in 2011.
Another factor contributing to the surge in car loan awards is the keenness of private equity investors to buy car loan securities which are viewed by firms as safe and rewarding investments. The Washington Post also details how in the last year GM Financial and Santander Consumer USA, two of the USA's biggest auto lenders, have sold 20% more of their auto loans securities than the previous year.
For consumers, the news is good both for choice of loans and frequency of awards. Greater investment gives lenders increased loan capital to pass on to would-be borrowers, including those with patchy credit backgrounds, equalizing the can loan market and giving more consumers access to affordable auto loans.
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