Breaking News
 STORY HIGHLIGHTS
  • The average FICO score needed for an auto loan dropped in the first couple weeks of August, allowing more buyers to be approved for a car loan
  • In August, the average FICO score for auto loans was 706.58, down from 726.05 in January

Average FICO Score Drops as Cash For Clunkers Shoppers Get Approved For Car Loans

By Liz Opsitnik
Wednesday, Aug 19 2009 10:40

As consumers flocked to dealer showrooms to take advantage of the cash for clunkers rebate program, auto loan lenders also jumped in on the action. With all those car shoppers needing car loans to buy their new vehicles, it seems auto lenders may have lowered their criteria a little or simply approved more people for car loans.

The average FICO score at the end of July and first few weeks of August dropped to 706.58, according to new data from CNW Research. This is down from January 2009’s average of 726.05.

Auto loan lenders may be loosening their credit criteria because of the huge response of the government’s CARS program. The initial $1 billion in funds ran out in the first week of the program. Another $2 billion was added to the program and about half of the $3 billion in total funds has been used to date.

A $3,500 to $4,500 rebate lowers the amount of risk the lender has to take on that vehicle’s loan, as it essentially lowers the price of the vehicle and the amount financed. Any time an auto loan lender lowers its risk, the consumer generally has a better chance of getting approved for the car loan.

average FICO score data - CNW Research

CNW Research's data shows that the average FICO score needed to get an auto loan has dropped every month, with August seeing the largest decline.

 

Chart via CNW Research.

 

Confused or unsure about some of the car loan terms used in the article? Click here for our Auto Loan Glossary.



Print PRINT E-mail EMAIL

Share/Save/Bookmark

          

Comments

2 comments on this story so far.

Your Name:
Your Email:
URL:
Your Comment:


Comment By: Rick C on Wed, Aug 19 2009 at 12:25 PM
Finally some auto loan movement, hopefully this program has kick started something positive. Hope I can get an auto loan as well this week.
Comment By: Clark Hanley on Wed, Aug 19 2009 at 1:32 PM
Wow if that's the avg then I'm well below avg....

512 More News Stories ...


FREE Car Loan Quote

Fill out the form below to get a FREE, No-Obligation Car Loan Quote.

Email Address:
 
Zip Code:
 
Auto Loan 101's
New Car Price Quote
Make:
Model:
Zip Code:
 
   
 

Experian Automotive's Latest Analysis Shows Auto Loan Market Continuing to StabilizeExperian Automotive's Latest Analysis Shows Auto Loan Market Continuing to Stabilize
Experian Automotive released its quarterly analysis of the automotive credit market today, and found that the auto loan market is continuing its stabi ... Read More

Toyota's New Incentives Pique Shoppers' InterestToyota's New Incentives Pique Shoppers' Interest
Toyota's March Sales Event, where buyers can get 0% car loans, low lease payments and complimentary maintenance, might be working. The national market ... Read More

Ford Up 43% in February, GM Up 12%
Attractive 0% auto loan incentives and affordable monthly lease payments were abundant in February. Industry experts knew that sales would be up sligh ... Read More