Getting an Auto Loan Today

Not so long ago, buying a car on credit was stress-free. Hardly anyone had to go without wheels. Through the 1990s and into the 21st century, dealers were selling cars for little (or even nothing) down, and lengthening loan terms to six and seven years, to keep monthly payments low.


Those days are gone. As the nation surged into financial crisis in late 2008, lending agencies tightened the purse strings–and knotted them tautly. Lenders have been limiting loans to shoppers with high credit scores, leaving subprime and near-prime folks out in the cold.

It’s Not You, It’s Me
"Financing sources are tending to be more restrictive about who they'll lend to, said Jack Tracey, executive director of the National Automotive Finance Association. These limits have "little to do with the individual borrower," Tracey added. They're more a reaction to the overall financial situation.


CNW Marketing Research found that subprime loan approvals have fallen sharply. In 2007, two-thirds were approved. In April 2008, the figure was 47 percent. By September, fewer than 23 percent of subprime applications were approved, dropping near 14 percent in October. Dealers also had to try nearly twice as many lenders, to get an approval.


Art Spinella, CNW's president, reports "more cash buyers than we've seen in years." Many are selling household assets, especially "discretionary purchases," to buy vehicles outright.