Cheap Auto Loans to Boost Car Sales?

[Mar 1, 2010.]

 

Auto Loans and the Wider Economy

The availability of affordable auto loans is closely tied to the economy. And, right now, the American economy is giving off seriously mixed signals. But the factors that most affect loan availability are generally good. Many believe that unemployment has passed its peak and that consumer confidence indicators are generally improving.

At least, that's the view of the National Automobile Dealers Association (NADA), whose chief economist, Paul Taylor, is predicting that light vehicle sales will jump to something close to 12 million units this year, "as credit becomes more available."

Great Trade-Ins

And a NADA press release, published February 14, contained more good news for those planning to change cars this year. Trade-in prices should be good.

Jonathan Banks, senior director of editorial and data services for the NADA Used Car Guide, said he expected sound economic fundamentals to drive a strong used-car market in 2010. And he went on:

Used-vehicle supply, even with the expected million-plus increase in trade-ins, will remain relatively low. Economic fundamentals point to improved demand, and more constraint on new-car production should keep those transaction prices in check. Seasonality effects are expected, but will be muted since used-vehicle prices are positioned relatively high compared to prices during the past five years.

No Credit Check Loans

Of course, finding an auto loan is more challenging for subprime borrowers that for others. But it's by no means impossible. As the automotive editor of edmunds.com points out: "There are plenty of credit grantors specializing in subprime lending who are eager and willing to loan money to those with bad credit."

However, there are penalties. And, if you have bad credit, it's important to recognize from the start that you won't get as good rates as those who've been lucky enough to hang on to their high credit scores.

One way to keep "no credit check loans" affordable is to put down as big a deposit as possible. And, as the Chicago Tribune pointed out last week, spending your tax refund on a replacement vehicle can be a smart way to invest in your future.

Compare the Market

The trick when finding any type of loan is to make sure you get the best deal you possibly can. And last week KTNV Las Vegas offered some good advice about that:

Luckily, our economic system has given us a way to take care of ourselves when it comes to auto financing issues, even in these hard times. The key procedure: Shop around. Comparison shopping is the best way to determine whether securing your financing through the selling dealer is the wisest choice.

Regardless of whether your credit score is great or less than perfect, you can find a competitive auto loan quote.

 

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.