Recent data from major credit bureau Experian showed that more lenders extended bad credit auto loans during the first quarter of 2011, loosening their restrictions on approval.
The data shows that subprime car loans jumped by 11 percent in the first quarter, as lenders extended the range of credit scores that they would lend to. The average score approved for a new car loan fell 10 points, down to 766. For used cars, the average credit score fell two points to 663.
"As the automotive credit market continues to stabilize, lenders are showing a higher tolerance for risk," said Melinda Zabritski, Experian's director of automotive credit. "With lower average scores for new vehicle loans and more loan activity for credit-challenged customers, it is easier to find a loan now than at any time in the past 30 months."
Loan terms in general also improved. The average amount loaned went up for both new and used vehicles, and consumers got an extra month to pay off the loans on average.
Drivers in the market for a vehicle should consider using an online third-party provider of auto financing. With lending conditions favorable right now, even those with poor credit can be approved for a loan if they apply online and act quickly.