dcsimg
   Facebook


rebuild.org finance news:

Back to Latest News Headlines

Cheap Auto Loans Come Roaring Back. But Legislators Stumble over Dealership Regulation

[May 23, 2010.]

 

Cheap Auto Loans More Widely Available

According to a recent story in BusinessWeek, people who want to buy cars are again finding it easier to get cheap auto loans. The report attributes much of the current sharp increase in vehicle sales to easier credit for car buyers.

And it went on to quote Lee Mitchell, vice president of Houston-based Group 1 Automotive Inc., saying: "Credit is thawing out. We're not getting 100 percent of the loans we ask for our customers, but lenders are giving us more ways to go."

Fewer Loan Defaults

One of the reasons for lenders' new-found willingness to extend credit is significant decreases in losses on existing auto loans. The Wall Street Journal reported on May 18 that a Standard and Poor's study found that default rates for these loans declined in April. Two days later, BusinessWeek quoted another study, this time from Fitch Ratings, that said losses on many U.S. auto loans dropped 30 percent between the end of 2009 and April 30 this year.

Auto Dealers' Loans--Regulation in the Balance

Some recent editions of this blog reported on some of the accusations leveled against car dealerships when it comes to credit. Consumer groups have alleged that many dealers gouge their customers with a range of unfair practices.

Legislators have been deciding whether to exempt dealerships from the provisions of new financial regulation laws. The New York Times summed up the current situation following the U.S. Senate's passage May 20 of the Restoring American Financial Stability Act of 2010 (S. 3217):

The House bill would exempt auto dealers from the reach of the new consumer agency; the Senate bill would not. President Obama has been outspoken in arguing against the exemption.

So both sides are now on edge as the new legislation enters the reconciliation process, and industry and consumer lobby groups are likely to be working overtime to sway the outcome.

Good Practice for Borrowers

With cheap loans, quick loans, and even no credit check loans again becoming widely available, more and more borrowers may be venturing onto dealer lots. Some will know their dealership and feel comfortable trusting it. Others will have read about the alleged cons, rip-offs, and rate gouging and will be more wary.

Either way, it's a good strategy to have a finance deal wrapped up before you say your first "Hi" to a dealer salesperson. That way, you can negotiate from strength and then make an informed choice about your best source of credit.

Get quotes for the sorts of auto loans you need--including no credit check loans.

 

About Author:

Peter Andrew has been writing about -- and for -- business for more than two decades. For the last couple of years, he has found himself increasingly specializing in the U.S. financial sector.

news subscription:

Easily subscribe to the rebuild.org news feed.

Read our news without even visiting our site!

Feedburner
Subscribe to our news

 

news archive:

Rebuild.org monthly news archive