Buying a new car got easier in the first four months of 2011 as loan issuers loosened lending standards and gave more money to people with lower credit scores, according to a new report out Thursday by Experian, a national credit bureau.
The average credit score for people who received loans for a new car was 766 in the first quarter of 2011, down ten points from the same time last year. It was the lowest average credit score for new car loans since the credit markets seized up during the financial crisis of 2008.
“As the automotive credit market continues to stabilize, lenders are showing a higher tolerance for risk,” Melinda Zabritski, Experian’s director of automotive credit, said in a press release. “(I)t is easier to find a loan now than at any time in the past 30 months.”
The share of car buyers getting loans with subprime rates grew by 11% in the first quarter of 2011 compared to the same period of 2010. Lenders feel more comfortable handing out loans because fewer people are delinquent on their car loans now than any time since the fourth quarter of 2008.
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Image: Michael Gil, via Flickr