I would certainly not say that it’s “no problem” for consumers to have bad credit, as states one line of this article. But I do think it’s interesting that the average credit score for car loans has gone way down since the peak of the recession. That, my friends, is what I hope to be a surefire sign that we are well on our way out of this recession mess. And not to disagree too heartily with Fox, but just because someone with not-so-hot credit gets approved for a car loan does not mean he or she is going to get anywhere near the same interest rate as somebody with better numbers. Don’t be fooled, friends. It may be a good time to buy a car because the average scores are low, but it’s still wisest to get your credit report up or else you could end up spending thousands more than necessary on interest. Here’s what Allie Johnson of Fox Business had to say about it:
“In the market for a new car but worry that your iffy credit score will put the brakes on getting a good deal? Take heart: A new report shows that you might be able to snag those keys after all.
During the worst of the recession, stringent loan requirements shut out many buyers with poor credit, skewing the average credit score of car buyers very high, to a peak of 776 for new car buyers in early 2010. A credit analysis recently released by Experian Automotive, however, found that more buyers with poor scores are getting approved, and adding their lower scores to the mix has brought average scores down almost to pre-recession levels. For new car buyers, the average score was 760 in the first quarter of 2012, just a few points higher than for that time period in 2008.
“A few years ago, it could have been much more difficult to get an auto loan,” says Melinda Zabritski, director of automotive credit at Experian Automotive. “A lot of lenders who specialize in subprime financing might not even have had the funds to lend.” But times have changed, she says: “It’s a good time to buy a car.” “
Buyer Beware Spoiler: if your credit score is not looking so hot, work on that puppy before applying for a loan. Otherwise, the double whammy will getcha– the loan will count as an inquiry on your credit report, which can put a minor dent in your score, AND rest assured that you will not be getting the best interest rates. Otherwise, test-drive to your heart’s content!