Credit Repair Blog

Auto Loans Are Harder to Get (thanks to the Credit Crunch)

A recent article in the New York Times proves what we have known for the last few months.  The credit crunch is affecting the average American, not just the hot-shots on Wall Street.  Here’s a quote from the article:

In 2007, nearly 83 percent of applications for auto loans in the United States were approved, according to CNW Marketing Research of Bandon, Ore. But so far this year, the approval rate has plunged to 63 percent.

“It frankly has become a nightmare for dealers and consumers who need a vehicle,” said Art Spinella, CNW’s president. “This is the worst we have seen it since we’ve been tracking it since 1984.”

Many shoppers — some with blue-chip credit histories — are able to get loans only at high rates.

“Instead of paying 7 percent like they should pay, they might have to pay 9 or 10 percent, and they’re just passing,” said Larry Kelly, general manager of Ritchey Cadillac-Buick-Pontiac-GMC in Daytona Beach, Fla.

The squeeze is particularly severe for customers with less-than-stellar credit scores who need subprime loans at higher interest rates.

While 67 percent of those consumers were approved for loans in 2007, only 22 percent are getting them this year, according to CNW.

If you have a poor credit score, you are going to have a very difficult (or at least a very expensive) time buying a new or used car.  What can you do?  Well, you can choose to walk, ride a bike, or take a bus ... or you can improve your credit score.

The difference between a high credit score and a mediocre credit score in this environment can mean savings of thousands of dollars ... just to buy a car.  What more motivation do you need to spend a few hours to raise your credit score?