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Report: Auto financiers giving more loans out than traditional lendersPosted On Mon, November 7, 2011
A recent report from Equifax noted that auto finance companies are lending to consumers at a much higher rate than banks or other lending institutions.
More than 850,000 loans were given out by auto finance companies in July 2011, compared to fewer than 582,000 in July 2009, the Equifax National Credit Trends Report noted. Banks and credit unions comprised less than 18 percent of the sub prime market, while auto finance companies comprised of nearly 39 percent.
"With unemployment rates remaining elevated for a prolonged period, auto lenders have proactively adopted more comprehensive data and verification tools for greater loan-level transparency in evaluating a wider band of consumers, which has helped enable the auto lending industry to recover more quickly than others," said Michael Koukounas, senior vice president of special client services for Equifax.
Consumers may benefit from the money they save by grabbing an auto loan, as they could put it toward an insurance plan. However, they may want to try to maximize their savings by focusing on affordable auto insurance rates.
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