Working off the premise that you need to drive to work, therefore in order to work you need to drive, and in order to drive you have to pay back your auto loans or the bank will take that sucker away from you, financial institutions gave car buyers some of the easiest financing terms since the financial crisis began. And not only that, but if you’re credit has tanked and you’re a “subprime” borrower, you’re more likely to get a loan. (Car loans have proved safer than mortgage and credit card loans during the recession.)
In the first quarter this year, interest rates fell 0.27% to 4.56% for new cars, and 0.06% to 9.02% for used cars. Loans were bigger in Q1 compared to Q1 of 2011, jumping an average of $589 to $25,995 for new autos and $411 to $17,050 for used guys. The average credit score for new auto loans dropped 6 points to 760, and the portion of new car loans given to subprime borrowers grew 11.4% in the quarter. The “subprime” label is attached to people with a credit score below 680.
Rates of late payments and repossessions also declined.
This likely bodes well for the auto industry as a whole, easing the path for all that pent-up energy demand to be released, making auto execs fat and happy, and helping reset the American fleet of vehicles to new, better and more efficient vehicles.
Speaking of fleets, what an awesome Game of Thrones episode on Sunday night. The show is AMAZING.
Let CarWoo! help you put all that easy car financing you just qualified for to use.