If the time has come for you to finance an auto loan, you are in luck. Banks and auto finance companies have begun to fund auto loans in record numbers, which bodes well for anyone currently looking to purchase a vehicle. As a result of the economic downturn, banks tightened up on their purse strings and the ability to obtain an auto loan became extremely difficult. Lenders were leery about lending in general and took a “wait and see” attitude. Basically, lenders stopped lending, except in those cases where a person had a long and excellent credit history. Thankfully, for those currently in the market to purchase a vehicle, times are changing! According to the credit reporting agency Experian, the number of car loans in theU.S.rose by almost 6% in the last quarter alone. This is the largest increase since 2009.
Auto Loans Boost Economy
Banks and auto finance companies, backed by low interest rates and easier lending regulations are aggressively targeting auto customers. Auto loans are considered small and only extend over a two to six year period, which makes them more appealing to lenders than longer term loans such a mortgages, which span thirty years. For this reason, the auto lending industry has far outpaced the mortgage industry in bouncing back from the economic downturn. Essentially, banks see auto loans as relatively safe and a good way to boost their interest income.
Subprime Lending On The Rise
For most banks, increasing revenue in the current economic environment of low growth and heavy regulation has become increasingly difficult. As a result, banks and auto financing companies are looking to widen their scope of business as they search for new borrowers. They have realized that people with bad credit, while riskier to finance, can in fact be good customers. Banks have also begun to recognize that subprime auto loans were not the reason that the market ran into past trouble; it was lending to them without so much as verifying their employment, income, and assets that was the problem. With a little more diligence and attentiveness, lenders are finding they can finance people with poor credit and this can be good for business.
All of the above spells good news for people looking to finance their next vehicle. Whether you are have good or bad credit, banks and auto finance companies have given the green light on auto loans!
Auto lending companies such as BlueSky Auto Finance are fully integrated with banks and lenders who specialize in providing auto loans. When you apply for financing through the BlueSky website, you will be notified immediately if you have been approved for an auto loan. For more information on how the application process works and to apply, click here.
