Bad-credit auto loans helped boost sales in 2013

bad-credit auto loanIt’s a good time to buy a new or used car if you need to borrow the money to make the purchase, even with a bad-credit auto loan.

That doesn’t mean bad-credit auto loans come without costs, only that they may be a little less painful.

“U.S. consumers are taking out bigger car loans with longer pay-back periods as lenders offer lower interest rates and accept borrowers with weaker credit ratings,” Reuters news service reported recently.

“Maybe auto consumers have noticed and adopted something of a swagger – more and more are cruising dealer lots looking for brand-new sets of wheels,” said

Interest rates for good- and bad-credit auto loans hit all-time low in 2013 and have shown only a slight uptick since, while average amount borrowed reached its highest point since 2008, according to Experian Automotive, a top credit-reporting organization, in an automotive finance market report.

And those finance market conditions are highlighted by increased nonprime and subprime, or bad-credit auto loans, good news for new or used car shoppers with bruised or no credit.

Nonprime, subprime and deep subprime new auto loans made up 26 percent of all new vehicle financing in the third quarter of 2013, up from 24.8 percent in the same quarter in 2012, said Experian. For used cars and trucks, nonprime, subprime and deep subprime loans comprised 55 percent market share in Q3, up from 54.5 percent in the year-ago quarter. Now may be a great time to refinance auto loan.

Still, a shopper’s credit rating can have a dramatic effect on his or her auto loan interest rate.

National average interest rates for new cars purchased with a 60-month loan (about average) ranged from 3.68 percent to 12.08, depending on the borrower’s credit rating as of Jan. 6, according to Informa Research Services and reported by the Yahoo Auto Finance Center. The average interest rates for a used car range from 3.86 percent to 14.22 percent for a similar 60-month loan.

“With loan rates at historic lows, car shoppers were able to take advantage and get a little more vehicle for their monthly payment. It’s a win for everyone, as shoppers perceive they are getting better deals and manufacturers and dealers are boosting sales,” Melinda Zabritski, a senior director at Experian Automotive, recently told

Kelley Blue Book predicted a final total of 15.63 million U.S. new-car sales for calendar year 2013, up 8 percent from 2012, and automotive experts generally agree sales in 2014 will be even greater.

For help calculating auto loan interest rates, visit for the latest data.

If you need fast-and-easy vehicle financing for a used or new car, crossover, pickup or SUV, RoadLoans empowers you to shop with confidence.

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