Ally Financial, a lender majority-owned by the federal government, has reported a profit in the fourth quarter of 2010, largely due to increases in demand for car financing.
Fourth quarter earnings of the home and auto loan provider were $79 million, a dramatic increase from the same quarter of 2009, when the lender recorded a $4.95 billion loss, Bloomberg reports.
Ally reported $589 million in pre-tax car finance income alone during the fourth quarter of 2010, compared to $343 million in the same period of the previous year.
The expansion of credit has not only benefited lenders but also borrowers, especially those in the market for a new car. Interest rates on car loans have plummeted to record lows, and individuals with bad credit history who had previously been priced out of the credit market may now find that car loans for people with bad credit allow them to finance their purchase of the new, reliable vehicle they need.
Acquiring credit has also become easier – many lenders approve a borrower's auto loan application within days of receiving it, thus putting him or her behind the wheel of a new car faster than ever before.