Subprime auto loan approvals for both new and used vehicles have increased over the past six months and are up again in March, according to data from CNW Research. Lenders continue to be more comfortable extending auto loans to shoppers who have less-than-perfect credit scores.
CNW says that about 12.7 percent of subprime auto loans (FICO score of 670 or less) for new cars are finding approvals in March, which is a 28.5 percent increase compared to March 2010. The average FICO score for new-car buyers is now 688.15. Just last month, it was about 690, while in January 2010, the average new-car FICO score was about 730.
Used car shoppers are finding similar thawing in auto lender credit criteria. Almost 39 percent of subprime used vehicle shoppers (FICO 670 or less) are being approved for an auto loan this month. CNW’s early March data shows that the average FICO score for used vehicle buyers is 615.29. This is down from about 618 in February. In January 2010, the average FICO for used car buyers was about 670.
Although the credit scores required to get an auto loan for a new or used vehicle are nowhere near where they were before the recession, this is good news for consumers who may have gone through a foreclosure or paid a bill late during the recession. Auto lenders seem to be less stringent with their criteria and are more willing to lend to consumers who have dinged their credit.