Yet another second quarter 2010 auto delinquency report this time from credit bureau TransUnion shows a drop in the 60 day delinquency rate and a drop in the year over year rate which is encouraging news for consumers hoping to finance their next car with a bad credit auto loan.
Cautiously optimistic
The second of the three main credit reporting agencies, TransUnion, released its own report following Experian’s report on Monday of this week and here at Auto Credit Express we find ourselves cautiously optimistic for the first time in quite a while. For us, as for many consumers in both the U.S. and Canada, the past two years have been exceedingly difficult.
Through our web site at www.autocreditexpress.com , we have, in the last 20 years, helped thousands of applicants reestablish their auto credit and raise their credit scores. By filling out our online car loans with bad credit loan application and avoiding a tote the note dealer, consumers with bad credit have been able to begin a new chapter in their lives by getting approved at one of our affiliate dealers for a second chance auto loan. Along with paying the rest of their obligations on time, they are able to eventually qualify for better interest rates on everything from their next auto loan to other types of credit, as well.
We’ve also helped them by advising on how to pick the right vehicle, since choosing one that’s too expensive could stretch their budgets and, in some cases, even result in repossession. If this happens, the only remaining choice is usually a tote the note car dealer. It also means that credit repair and rebuilding their car credit has to be put on hold for at least a year, since even bad credit lenders will only consider applicants with a repossession on their credit report that’s over than a year old.
We also like to keep our applicants updated on what’s happening in the lending industry – something that happens to be in the news this week.
TransUnion second quarter report
In news from TransUnion this week, the consumer credit site released its latest report on automotive lending – this time dealing with auto loans in the second quarter of 2010. These auto delinquency reports, it should be pointed out, are extracted from a huge database consisting of 27 million anonymous credit-active consumer records that are randomly sampled every quarter.
According to Trans Union, the national auto loan delinquency rate fell 19.7 percent between the first and second quarters of 2010, while the year-over-year delinquency rate fell by 27.4 percent in the second quarter.
The analysis
“The national trend we are seeing continues to point to a clear improvement in payment behavior. Although part of the reason for the turnaround in delinquency rates is the influx of new, lower risk loans as we have noted before, consumers do not see a quick fix to the short term economic and employment situation and are focusing their attention instead on savings and lower consumption of discretionary goods,” said Peter Turek, automotive vice president in TransUnion’s financial services group. “This movement toward fiscal responsibility is reflected in year-over-year results as auto delinquency rates now have dropped 27.4 percent since second quarter 2009 – the largest decline since the summer of 2001. On a state-level basis, 46 states experienced a drop in their quarter-to-quarter delinquency rates, while only 3 states showed an increase on a year-over-year basis.”
TransUnion’s report also shows that national bank auto originations increased by “the largest margin since the recession began in 2007” – 18.7 percent on a year-over-year basis.
Bad credit car buyers
The bottom line for bad credit car loan applicants is that the general loan landscape has improved considerably and bad credit auto loan lenders are beginning to increase the actual number of loans they are writing. At the same time, these lenders are only backing off slightly from the conservative lending stance they’ve taken since the beginning of the recession three years ago. When comparing current loans to those approved more than three years ago, this means that an individual with bad credit and a given credit score will still be subjected to higher interest rates (probably with a shorter loan term) and will be asked to put down a larger down payment than in, say, 2007.
Our advice to credit-challenged consumers applying for car loans with bad credit remains the same as it has been for the past 3 years:
• Know your credit score and what’s contained in your credit report
• Plan on coming into the loan with at least 10 percent down in cash or trade equity
• Keep the loan term as short as possible
• Buy a compact of midsize vehicle and put off financing your dream car until after you’ve reestablished your credit.
As we see it
At Auto Credit Express, we have helped thousands of people with bad credit find the right dealer that can help them get financed. More importantly, the car loans with bad credit that finance these vehicles have started these people “on the road” to reestablishing their auto credit and lay the foundation for a good credit history.
We make no promises in regards to guaranteeing you credit, but we are associated with dealers that have some of the best special finance departments in the country, giving you the best chance possible at securing an auto loan.
So if you’re serious about reestablishing your credit, you can begin the process right now by filling out our secure online bad credit car loan application.
