How to Get an Auto Loans During Credit Crunch
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SANTA MONICA, Calif.--Is it possible to get a car loan in this time of economic stress? Edmunds.com, the premier online resource for automotive information, has compiled the definitive guide to auto loans for car shoppers and anyone else interested in the twists and turns of the economy.
“The credit market is definitely tighter now than it was a few months ago, but credit is still available for car shoppers,” said Jesse Toprak, Edmunds.com Executive Director of Industry Analysis. “Media reports about consumers who are unable to get auto loan financing are often overstated and have the negative effect of dissuading consumers from even trying.”
That being said, Edmunds.com has observed the following new realities of the auto loan landscape:
- Consumer with average credit scores will be required to make a down payment as high as 20 percent
- Lenders are restricting the length of loans; six year loans may no longer be an option for many consumers
- The minimum credit score required for an auto loan has risen to around 500
- The credit score required for the best loan rates has risen to at least 720, up from 700 a few months ago
- Consumers with the best credit can expect an interest rate as low as 5.95 percent while consumers with average credit may see rates as high as 12.5 percent
Edmunds.com suggests the following strategies for consumers on the hunt for auto loans:
- Get pre-approved for a loan before visiting the dealership
- Pay off credit cards with high balances to immediately improve your credit score
- Offer the highest down payment that your budget allows
- Look to credit unions, local banks and online lenders as alternative sources for auto loans
- Consider less expensive used and certified pre-owned cars if finding new car financing proves difficult
For more specifics on the interest rates available to consumers in each credit tier, strategies for consumers in need of an auto loan and a detailed explanation of the auto credit market, please see “How To Get an Auto Loan During the Credit Crunch” at http://www.edmunds.com/advice/finance/articles/135386/article.html.
About Edmunds Inc. (http://www.edmunds.com/help/about/)
Edmunds Inc. publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value®, is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in 2006 and is an automotive social networking Web site and home to the oldest and most established automotive community. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.
