Demand for auto loans predicted to increase

Demand for auto loans predicted to increaseDemand for new cars is expected to rise among consumers with good credit history in 2011, according to credit reporting bureau TransUnion.

Most leases that are set to expire next year are held by drivers with good credit history, and such drivers will either have to purchase the cars they've been leasing or buy another if they wish to continue to have a vehicle, The Associated Press reports. In fact, only 10 percent of car leases set to expire in 2011 are held by drivers with bad credit history.

TransUnion states that this development is good news for traditional lenders, as good credit borrowers are perceived to be less likely to default on their car loans.

Still, drivers with bad credit history shouldn't be dissuaded from applying, since there has also been a recent expansion of credit to those with subprime credit scores. There are also many specialized lenders who provide car loans for people with bad credit, making it possible for such consumers to obtain online car loans by filling out a car loan application.