New data released by major credit bureau Experian shows that more lenders are accepting applications for car loans from buyers with bad credit.
Bad credit car loans accounted for 18.2 percent of loans in the second quarter as compared with 17.6 percent the year before, according to the company. According to the Wall Street Journal, the increase, though modest, could be a sign that lenders are beginning to look toward subprime borrowers as an option in the wake of the economic crisis.
In response to the financial collapse, many lenders cut off credit to riskier drivers, making it difficult to get car loans. Some analysts suspect that this was a contributing factor in the auto industry’s sluggish sales in 2009.
Melinda Zabritski, director of automotive credit for Experian said that although “lenders have not loosened their criteria to the levels we saw three years ago, we do see an upward movement in loans to those middle-risk tiers.”
That could be good news for a host of car buyers, as getting financing via an auto loan is often a major obstacle for those with bad credit.