Despite lenders tightening their belt during the recession, businesses are beginning to offer bad credit car loans again, and subprime lenders are expanding their networks to work with even more car dealers.
According to data provided to the Detroit News by credit reporting agency Experian, bad credit car loans made up 17 percent of all new car loans written in the first quarter of 2010. Things looked even better for those with bad credit looking at used cars, as 53 percent of those car loans were in the subprime lending bracket.
“A couple of months ago, it was horrible,” George Magliano, an automotive research analyst with IHS Global Insight, told the news source. “The least blemish on your credit report and you got nothing.”
In addition, it may be great time to apply for a car loan. Besides increased technology making it easier to apply online, interest rates are falling as well, down to an average of 6.3 percent from 7.2 percent a year ago.
As a further sign of dealers preparing to offer poor credit auto loans again, automaker General Motors recently acquired subprime lender AmeriCredit. The company underwent a major expansion earlier this year, jumping from a network of 4,500 dealers to over 8,000, and that number is expected to grow under GM.