According to the Dallas Morning News Wall Street's bad luck seems to have infected the car sales and loan industry in Dallas-Fort Worth area. Sales continue to slide, dropping as much as 35% in several car dealerships in the Dallas-Fort-Worth community. With the availability of car loans becoming more limited, many dealerships are finding buyers scarce and reluctant. Most people can't afford to pay cash for a car, even a used one and depend heavily on car loans to help them make the purchase. But according to several car dealers it is becoming tougher to find car loans for subprime borrowers. Those with good credit are still able to get car loans; but those with less than stellar credit are finding that the car loans come with stricter requirements.
Car Loan's Tougher Requirements:
Down payments required sometimes as much as 10% on the car loan.
Higher interest rates for those with average or below average credit scores.
Limits on rolling over negative equity into a new car loan for customers who owe more on their trade-in than it's worth.
Fees of up to $5,000 to grant subprime car loans at some banks
Drew Campbell, president of the New Car Dealers Association predicts that new-vehicle sales in Dallas-Fort Worth, which rose 3 to 4 percent annually for most of this decade, will fall by double digits in 2008.
If you want to get a car loan but your credit is less than perfect you may need to consider the following:
- Buy a used vehicle, the car loan with be smaller.
- Provide a larger down payment which may increase your chances of getting approved for a car loan.
- Buy the car with all cash and avoid a car loan completely.