In 2008, when the government announced plans to bail out the auto industry, many Americans were surprised to learn that the industry has reached such a low point. At the time the big American auto companies were all ailing from economic woes, and faced all out bankruptcy. The reasons? Non-unionized competition from overseas, huge pension costs, and the inability to fund jobs and benefits. Thanks in no small part to the economic stimulus, the American automotive industry has come back from the grave, streamlined their business, and cut excess costs. They’re now coming back with what will hopefully be stronger strategic plans.
Good Time To Buy A Car?
Now that the big 3 manufacturers are slowly coming back, many are encouraging Americans to buy back into the auto industry by buying new car. MSN reports that if you have a relatively good credit history, then you can probably receive a pretty low rate on a car loan.
Folks with untarnished credit will find good rates, eager lenders and some amazing deals as increasingly desperate car manufacturers try to revive sagging sales.
With many lenders eager to work with consumers and a car industry highly motivated to keep sales alive for American-made products, you can get some great savings towards the purchase of a new car.
On the other hand, people with low credit scores are having a hard time getting the same kinds of deals as those with stellar credit histories. While these customers can still receives loans to buys cars, the rates are much higher, which puts the customer at risks for not being able to make the monthly payments.
Folks with troubled credit will find higher rates, increased scrutiny and warier lenders, but they won’t face anything like the trouble they’d experience if they were shopping for a mortgage.
Lending standards from the automakers have been made much stricter since the crash as they now know the inherent risks in lending to those with big credit risks, and they didn’t want auto lending to become the next sub-prime lending crisis, as it did in housing.
Finding A Better Deal On Your Loan And Insurance
In order to stave off this concern lenders are currently more likely to work with consumers who have a positive burrowing history. If you’re concerned about your loan application, check your credit score and consider talking to a lender about finding a better rate, and options for cash rebates or savings. Also consider finding a loan through a credit union or other bank before going to the dealership, and ask the dealership to beat the best rate that you find.
Control the things that you can, like improving your credit history. Pay off all installment loans on time, dispute incorrect statements on your credit, ask companies to remove things from your credit file, and pay off debts that you may have.
When it comes time to actually purchase your car, also make sure to get and research free insurance quotes online to get the best deal on insurance as well. Don’t forget to look up ways to get a reduction in your insurance rate, like multi-car discounts, and companies that give discounts for good drivers.
While the automotive industry is back on it’s legs, things aren’t completely back to where they were before. Lending standards are now stricter, and if you’ve got a dent in your credit, you may not find it as easy as before to find a deal. The key is to do what you can to improve your credit, shop around for the best deals on cars and insurance, and in the end you’ll find what you’re looking for.
Have you found recently that buying a car was a bit tougher? Tell us about it.