Why Now is the Best Time to Get a Used Car Loan, Especially for Those With Bad Credit

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AutoTempest.com explains the current state of getting used car financing, and why changes in the financing world make now a better time than ever to buy a used car.

The cheaper the car, the faster it will be paid off, and that is a plus even when loan rates are low.

Things are getting better for consumers in the world of dealership financing. Last summer, the FTC issued an interpretation of the Risk-Based Pricing Rule that says dealers have to let buyers know if and why they have been turned down for financing. On top of that, the average credit score of those approved for used car loans is the lowest it’s been since early 2008. The combination of these two things means that it if you are going to get financing to buy a used car, now is the time to do it.

Why does it matter if dealers do or do not tell the buyer why they have been turned down for a loan? Say there is an honest mistake made somewhere that gets the buyer and someone who shares their name mixed up, and now someone who has excellent credit gets turned down. Or maybe a dealer makes a less honest mistake, and even though the buyer qualifies for a better financing rate, the dealer says they will have to go for one of the higher and more dealership-profitable financing options. In both cases, having this legislation in place helps prevent these less than favorable issues from occurring.

With that in mind, car loans for people with bad credit are becoming much easier to get, and financing rates are dropping in unison. Earlier this year, the average credit score of those getting approved for a used car loan was 659, only 6 points above what it was in early 2008. Subprime loan approval rates are the highest they have been since before the recession, which means the market is opening up for people with bad credit to get loans for their used cars. As financing institutions are able to make more loans, they can set the rate for each individual loan lower, making auto loan rates lower even for those with good credit. Finally, interest rates in general are at an all-time low, which brings auto loan rates down as well.

These factors combined make now one of the best times to get a loan for a used car, especially for the smart buyer who considers financing when negotiating with the dealer and shops around for the best rate. The one downside to great loan rates is that it can be tempting to buy a more expensive car, just because the financing is affordable. Buyers need to keep their wits about them and really think about what they need. The ideal situation is still a small loan or no loan at all. On top of being smart with your financing, consider using the AutoTempest Used Car Search Engine to find and compare used cars from all the major online used car classifieds sites, and get the best price on the car that’s right for you. The cheaper the car, the faster it will be paid off, and that is a plus even when loan rates are low.

About AutoTempest

AutoTempest.com provides all the tools and resources needed to find the ideal car for any budget and lifestyle, and to make the experience both informative and enjoyable. The AutoTempest used car search engine brings together used car listings from the top sites around the web, searching craigslist, eBay Motors, Cars.com and many more to help find that ideal used car.

AutoTempest is not affiliated with or endorsed by craigslist or AutoTrader.

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