![]() Used cars, for example, often are available with financing provided by the dealership itself.īut if you have your heart set on buying a new car, there's no need to screen yourself out of the possibility by worrying - probably needlessly - that you won't be qualified for credit. Less creditworthy consumers, especially, "might consider less expensive cars in order to qualify for more attractive finance rates," Reed said. Used cars and certified pre-owned cars (late-model used cars that have been refurbished and warrantied by manufacturers) also are options, of course. ![]() Now consumers just have to be more realistic about their auto budget." "In the past, leasing allowed people to get into cars they otherwise wouldn't have been able to afford. "These new restrictions on leasing are bringing consumers back to reality," said Philip Reed, senior consumer advice editor. And certainly for the least creditworthy consumers, said Bank of America Dealer Financial Services President Ellsworth "Ellie" Clarke, "the leasing option probably is eliminated." Even luxury-carmakers such as Mercedes-Benz and BMW have cut back, and they're encouraging more customers to take out auto loans to buy their vehicles. Carmakers also have moved to restrict leasing because they're trying to buttress the value of vehicles when they come off their leases in two or three years. But one irrefutable fact is that the credit crunch has greatly reduced the automotive leasing market. Many consumers have gotten used to leasing over the last 10 or 20 years. ![]() Read the other three parts of this series to guide you through each step. Finally, engage dealers and lenders in getting a vehicle - and a loan. While clearly these are unusual times, moving from consideration of a new vehicle purchase to signing the loan papers is a three-step process. There are plenty of incentives to lower costs." The National Auto Dealers Association said that "for many people this may be the best time to buy a car in years. "If someone needs a car, they know the market is down, and this is a great buying opportunity," said Toprak. But this doesn't mean you can't get an auto loan if you want one.Īnd with dealers and factories desperate for sales, it's a wonderful time to be a credit-enabled buyer. People are avoiding all big-ticket purchases, including cars. "Consumer confidence has fallen to historic lows," said Toprak. Jesse Toprak, 's executive director of industry analysis, agreed. "But we have the means to support creditworthy individuals." "There are likely many customers sitting on the sidelines now - not wanting to make a big-ticket purchase," said Mike Groff, group vice president of sales and marketing for Toyota Financial Services. ![]() In general, people's hesitation to venture into the market is more a reflection of the nation's collective lack of consumer confidence than lenders' refusal to take them on. bankruptcy due to medical bills) and an unusually high down payment can make a significant difference in lenders' loan decisions and the rates they charge. In addition, factors such as employment stability, household income, explainable credit troubles (i.e. Note: These rates are estimates, and actual rates will vary. Source: Informa Research Services, Inc., Calabasas, CA.Ĭredit Union Rates are the average of several prominent credit unions as of November 6, 2008. Keep in mind that these rates are only estimates, and that your actual rates will vary depending on the individual characteristics of your personal financial situation and credit history.ĭealer Buy Rates are the average of several national lenders' wholesale rates to dealers as of November 6, 2008.īank Rates are the average rates of more than 900 lending institutions as of October 9, 2008. It gives you a rough idea of the current terms for borrowers in various tiers of creditworthiness as measured by credit score. To see how much it will cost you, check out the Auto Loan Rates chart below. And it's true that many lenders are raising the hurdles to auto loans.īut most Americans can still get credit to buy a vehicle. News coverage implies that you don't have a prayer of qualifying for a vehicle loan unless you've got the bank balance of an NFL quarterback or the financial savvy of a CPA. This four-part series from will guide you to that goal.Ī broad "credit crunch" related to the global financial meltdown is squeezing auto lending these days. But one concern is holding you back: Can you really get the auto loan you need to complete a purchase? The answer is an enthusiastic "Yes!" - though with some strings attached.
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