NEW YORK ( BankingMyWay) -- Have you been holding off a new-car purchase because you think lenders will turn you down? Well, take heart: Lenders are getting easier on borrowers with less-than-perfect credit.
Experian Automotive, a unit of Experian, the credit-rating firm, reported Tuesday that "loans in the nonprime, subprime and deep-subprime risk tiers accounted for more than one in four new-vehicle loans in
"Because the overall lending environment has improved, lenders are making loans available to a wider range of customers," said Melinda Zabritski, director of automotive credit for Experian Automotive. "This is good for manufacturers and dealers, as it allows them to sell more vehicles."
Experian said the average new-vehicle buyer borrowed $25,714 in the second quarter, the average used-car borrower $17,433. Both figures were several hundred dollars higher than a year earlier.Okay, so loans are easier to get. Is it a good time to buy a new car? For automobile-finance purists, that's a trick question, because they believe it's never a good time to purchase a new car, because used cars are a better buy. Those figures on average loan amounts underscore the obvious: Used cars are cheaper. Of course, they're used, which means they won't last as long. But today's cars can last an awfully long time. Ten or 15 years of relatively trouble-free service is not uncommon, and that means 150,000 miles, maybe 200,000 or more. If you buy a three-year-old vehicle, it could be only 20% through its useful life but might sell for 30 or 40% less than when new. That's because the
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