Pressemitteilung

Traditional lenders like banks and credit unions as well as private creditors have registered a marked increase in granting approvals for guaranteed auto loans. Thanks to a trillion dollar Government Stimulus package which provides a thrust to these credits lending institutions. With car loan rates plummeting to record lows in December, borrowers are securing new car loans online at much cheaper costs. This explains the spiraling up trend in auto loan approvals provided by different auto finance solution providers. Apart from this, partial loosening of credit could facilitate the sales of over a million vehicles - both cars and light trucks – is what industry analysts predict. It could be the best monthly results since August. That is good news for the automobile industry considering its dismal performance in the year 2009.

While December witnessed a meteoric rise in guaranteed approval car loans for consumers with an average or above average credit ratings, the previous two quarters too have recorded similar observations. Similarly, an inadequacy of used cars has paved way for stabilization of used car prices, thereby making used car loans attractive to traditional creditors. Studies indicate that individuals with good credit standings were able to secure guaranteed car loans from auto finance lenders with rates of interest as low as 5.74% down from 6.65% a year back for a 36-month car loan. However, the real boom for car loan approvals was observed in the auto financial solutions for borrowers with sub-prime credit ratings who paid more for car loans. Typically, the car loan interest rates by private lenders for the particular segment rose to 18.56% up from 16.47% a year ago.

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While there has been a surge in demand for cars since the beginning of last year, the real transformation has been observed only after the implementation of the government backed Term Asset Backed Loan Facility or the TALF program which initiated last March and allows investors to borrow money from the Federal Reserve to buy the guaranteed auto loans from lender’s books. This ultimately helps in raising finances and provides room for online auto credit lenders to generate more funds for car loan financing solutions.