Although credit is loosening a bit, the consumers with the best credit scores are still having little problem getting approved for car loans, while shoppers with the worst scores are still struggling or simply accepting the fact that they’ll have to pay much higher interest rates.
According to Experian Automotive’s fourth quarter 2009 automotive market analysis, 36.92% of all auto loans were for new vehicles, while 63.08% were for used vehicles. The average credit score for new car buyers was 775, while it was 680 for used car buyers.
When looking at all car loans (new and used cars combined) the majority were approved for those with super prime credit scores, at 50.28%. Consumers with prime scores made up 13.3%, nonprime was 12.34%, subprime was 11.31% and deep subprime was 12.77%. When compared to the fourth quarter 2008, super prime was up 10.08%, while nonprime was down 7.53%, subprime was down 14.32% and deep subprime was down 11.83%. This means that fewer people with bad credit scores received auto loans in the fourth quarter, while those with good credit scores received more loans.
If you’re wondering who to apply with for your auto loan, Experian Automotive looked at the lenders who approved the most auto loans in the fourth quarter. On the new vehicle side, the top 10 in order were Chase, Toyota, GMAC, Honda, Ford, Nissan Infiniti, Bank of America, Wachovia, BMW Bank and US Bank. The top 10 lenders who gave the most used car loans were (in order) Wachovia, Chase, Toyota, GMAC, Capital One, US Bank, BMW Bank, Carmax, Bank of America and Fifth Third Bank.
The average amount financed increased in the fourth quarter of 2009. A year ago, it was $24,439 for new cars and this year it was $25,580. Used car buyers financed on average $16,276 in the fourth quarter, up $375 from the same time last year.
The length of auto loans for buyers in the fourth quarter remained about the same at 62 months. Used buyers took out their car loans for an average of 57 months. The average monthly payment for new buyers was $467, while for used buyers it was $340.
The last statistic we’ll look at is one of the most popular questions on our site. What interest rate can I expect to pay based on my credit score? Overall, it was 5.66% for new cars and 9.27% for used. Broken down by credit tier, new car buyers with super prime scores paid 4.74%, prime received 6.08%, nonprime paid 7.87%, subprime received 11.01% and deep subprime paid 13.64%.
Used car buyers in the fourth quarter paid higher APR’s. Those with super prime scores paid 6.31%, prime paid 8.15%, nonprime received 10.66%, subprime paid 14.82% and deep subprime received 17.96% interest rates. Clearly, those with the worst credit are still able to get approved for auto loans, but they will receive much higher rates.
Experian’s Credit Tiers (Scorex PLUS score) – Super prime: 740+, Prime: 680-739, Nonprime: 620-679, Subprime: 550-619, Deep subprime: less than 550