Auto loans are being made available to more and more Americans as credit standards loosen, a recent report by Experian Automotive released on Tuesday has said.
Across Americans of all credit standings, more auto loans were doled out in the third quarter of 2010 compared to Q3 2009.
The year-on-year percentage of those with poor credit—subprime customers with credit scores between 550 and 619—who received new car loans jumped from 5.66 percent to 6.61 percent.
Meanwhile, the percentage of those with the poorest credit—deep-subprime customers with credit scores less than 550—leapt to 1.59 percent from last year’s 1.46 percent.
The growth in auto loan lending is a good sign for the car industry as well as the economy on a whole, the report said.
“Easier access to loans is a positive sign for the auto industry, as tighter loan criteria during the economic downturn represented a significant challenge for automotive manufacturers and their retail networks,” Scott Waldron, president of Experian Automotive, said in a statement. “Making it easier for consumers to obtain credit can only help the auto industry moving forward.”
The report also noted that delinquencies have fallen as borrowers are improving their on-time payment rates for auto loans.
Both 30-day and 60-day delinquency rates fell from one year ago: the 30-day percentage of delinquencies for car loans went from 3.27 percent to 2.99 percent, and the 60-day rate went from 0.93 percent to 0.77 percent.
The positive delinquency trends could mean more liberal lending policies that further boost auto loan lending rates.
“With delinquencies down and less money in their portfolios at risk, lenders can be a little less conservative in their lending strategies,” Melinda Zabritski, Experian director of auto credit, said in a statement. “Consumers still have the impression that lending is extremely tight, so it will be important for lenders and automotive retailers to educate car shoppers that there are more loans available to a wider group of consumers.”
Across Americans of all credit standings, more auto loans were doled out in the third quarter of 2010 compared to Q3 2009.
The year-on-year percentage of those with poor credit—subprime customers with credit scores between 550 and 619—who received new car loans jumped from 5.66 percent to 6.61 percent.
Meanwhile, the percentage of those with the poorest credit—deep-subprime customers with credit scores less than 550—leapt to 1.59 percent from last year’s 1.46 percent.
The growth in auto loan lending is a good sign for the car industry as well as the economy on a whole, the report said.
“Easier access to loans is a positive sign for the auto industry, as tighter loan criteria during the economic downturn represented a significant challenge for automotive manufacturers and their retail networks,” Scott Waldron, president of Experian Automotive, said in a statement. “Making it easier for consumers to obtain credit can only help the auto industry moving forward.”
The report also noted that delinquencies have fallen as borrowers are improving their on-time payment rates for auto loans.
Both 30-day and 60-day delinquency rates fell from one year ago: the 30-day percentage of delinquencies for car loans went from 3.27 percent to 2.99 percent, and the 60-day rate went from 0.93 percent to 0.77 percent.
The positive delinquency trends could mean more liberal lending policies that further boost auto loan lending rates.
“With delinquencies down and less money in their portfolios at risk, lenders can be a little less conservative in their lending strategies,” Melinda Zabritski, Experian director of auto credit, said in a statement. “Consumers still have the impression that lending is extremely tight, so it will be important for lenders and automotive retailers to educate car shoppers that there are more loans available to a wider group of consumers.”
