Auto financing with bad credit could come to a screeching halt after three years of national lenders passing out loans to people with sketchy credit histories. The original intent was for the government to help car manufacturers increase production by allowing more people with low credit scores to qualify for a car loan or refinance.
Part of the delinquency issue for people who need auto financing with bad credit is due to the fourth quarter losses during holidays and end of the year taxes when people usually stretch their budgets. This was recently stated by the S&P:
“Many lenders have told us that their performance in recent years exceeded their expectations,” Martin wrote in a report last month. “We are now hearing that they expect losses to trend upward to more normal levels this year and next.”
While the best may be behind us for rock bottom rates for people with bad credit history there’s still a good chance that after tax season we may see a normality of car purchases and loan payoffs which would steady the bleed off of car repossessions and loan delinquencies.
According to Experian Automotive repossessions and loan defaults have increased 1.23% since September which constitutes the largest climb since 2006 (when Experien started tracking their data).
The good news is that bad credit auto financing will always be available to consumers. While rates might fluctuate we are always on the side of the consumer to keep them as low as possible. We are still able to qualify 99% of our applicants for a car loan or personal loan. Apply here to see if you can get approved today.