Current Auto Loan Rates

| January 3, 2012

Nowadays, around 70% of people buying cars do so in the manner of auto loan financing. Therefore, current auto loan rate is as much as a significant factor as the total price in the car dealership industry as it determines the expense in the long run. However, the cost per unit is not an appropriate match for the salary of a normal working individual making car loan financing difficult when the year of 2011 was starting to enter as a left over effect of the highest turns in rates last 2010. Additionally, many lending institutions are the least bit interested with applicants once bad credit history is found with their supporting documents.

Fortunately, this is not the same anymore as the months progress with some of the firms that provide auto loans. The current average loan rates have begun to decline by the week. The decrease depended on the type of auto loan. For instance, a new car loan that will last for 5 years now only has rates of 5.57% from 5.29%. The 4 year loan on the other hand will average rates of 5.15% from 5.18% while the 3 year loan has rates of 5.02% from 5.07%. As for secondhand car loans, the average rate is 5.51% for 4 years. As compared to the previous rates from 2010 to the beginning of 2011 which averaged on 6.17% for new cars in 5 years and 7.19% for used cars in 3 years, the state of current auto loan rates are shaping out well.

To have the best chance of getting these average, or perhaps even lower, auto loan rates, it is best that interested buyers use the services of lending institutions that focus on bad credit financing. However, the applicant may also work in getting the credit scores back up by correcting any errors in the report such as on time payments as well as pay the smallest amounts gradually. Having a slightly good credit score will serve as leverage for negotiations. Analyzing the average rates also, one would definitely have to rethink the decision of whether a brand new or a used car is better as the latter has higher rates. Aside from this, the make and the model will also affect the interest rates of vehicles.

In the case of initial down payment, current auto loan rates may also be lowered or unaffected depending on the chosen lender and their company’s policy. However, it is important to also know that the market is currently on a fierce competition as there have also been declines on loan applications resulting from the previously high rates giving some advantage to current applicants.

Category: Car Loan

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