Car loans becoming easier to get
The lending market for vehicle loans has softened, helping to drive car sales. Some lenders are even courting subprime borrowers.
Jeremy Hobson: The Federal Reserve kicks off a meeting today in Washington. And when policymakers come out with their statement at the end of the meeting tomorrow, everyone's going to be waiting to see if more economic stimulus is on the way. The economy hasn't been performing up to expectations recently in almost every category: Corporate earnings, consumer spending, jobs, housing, car sales...
Well actually, for some reason, car sales have been doing okay. And as Michigan Radio's Tracy Samilton reports, that's not so much because of what's happening at the dealerships. It's more about what's happening at the banks.
Tracy Samilton: When banks froze lending in late 2008, it threw a huge monkey wrench into the car selling business.
Debbie Crum is financing manager at Snethkamp Chrysler in Redford, Mich. She says even customers with spotless credit couldn't land a lease or loan. Today, credit has eased to the point that most applications are stamped: "approved."
Debbie Crum: Instead of finding a way not to buy the deal, they're finding a way to put a deal together.
And if you do have that spotless credit, the banks and the dealers really want your business. Michelle Krebs is an analyst with Edmunds.com.
Michelle Krebs: 0.9, 2.9 -- they're not uncommon rates.
Even the subprime car loan business is booming, says Krebs, although people with seriously dented credit scores will pay a premium -- up to 10 percent interest for a loan. And dealers say it's not a return to the bad old days of automatic rubber stamping. So sorry. No job? No loan.
I'm Tracy Samilton for Marketplace.