A new car will come with a lower interest rate, but used cars often have higher interest rates due to the rate at which cars depreciate. Your lender will also consider the type of vehicle you want to buy. If you have a low score, your interest rate will be higher. If you have a high credit score, you can expect your car loan interest rate to be quite low. However, a score of 300 indicates that you're an extremely risky borrower. You'd be considered a very safe borrower. If you have a score of 850, your credit history is excellent. Your credit score is a numerical value between 300 and 850 that tells a lender how reliable you are as a borrower. The biggest factor in this decision is your credit score. Even if you already know what kind of car you want, knowing this information can help you decide if now is the best time to buy a car, or if you should wait until your financial situation improves: Credit Score If you want to figure out the average car loan interest rate for buyers like you, you should know which factors potential lenders will consider. What Factors Determine Your Car Loan Interest Rate? Looking to refinance your auto loan? Compare lenders below. Here's what you need to know about average car loan interest rates, including how you can find a better interest rate for your situation. In general, you'll get a lower interest rate if you have a high credit score. When you know the average car loan interest rates for your credit score, you can determine what kind of annual percentage rate, or APR, you can expect. Lots of factors impact what type of financing you can get and your rates, like your credit score. Now it may be used as leverage in the purchase of an automotive lending and leasing agency, indicating just how turbulent these times really are for the automotive industry.When you shop for a car, one of the biggest challenges can be finding a loan you feel comfortable with. The primary cause of the loss was a $1.8 billion shortfall in the mortgage-handling GM Rescap branch, while the global automotive finance section lost $717 million.Ĭhrysler cut its leasing programs earlier this year as a pre-emptive measure to help reduce costs due to depreciation of vehicles coming off lease. GMAC posted a $2.48 billion loss in the second quarter of 2008, down about $3 billion from the second quarter of 2007. Whether the consideration of a sale or other transaction with its GMAC ownership is among those assets to be sold is unknown. General Motors recently confirmed it has decided to sell Hummer and a French parts factory, and that move was taken as part of an ongoing series of asset sales that are designed to help the company meet its goals of cutting $10 billion of cost from its infrastructure while raising $5 billion in cash. Now GMAC's function for GM will simply more closely mirror the financial reality of the marketplace. volume came from leases in September, compared to 16.8% the year prior, reports Automotive News. The decision to opt out of leasing won't have a large impact on GM's bottom line, however. GM's decision last week to stop offering leases through GMAC is similarly important, though, likewise, not entirely unexpected. Even with the incredibly tough mortgage market and the worldwide difficulties facing the credit sector, Cerberus is reportedly considering trading its stake in Chrysler to GM in exchange for full ownership of GMAC.Ī report late last month that General Motors was considering 'strategic options' - industry-speak for sale - for its GMAC finance house is unsurprising given the current economic conditions, though it is potentially momentous. The company currently expects these actions to remain in place until the credit markets stabilize and accessibility improves," GMAC said in a statement.Ĭerberus, which owns 51% of GMAC and also owns 81% of Chrysler, LLC, does not appear to be unhappy with its ownership of the financing company, however. "These changes in pricing and underwriting are related to the current market environment, which has reduced access to funds and increased the cost of funds. On the other hand, about 74% of the prime car-buying public holds a score above 700, meaning that while the majority of American citizens may not qualify for GMAC loans, the majority of those in the market will, reports Automotive News. The move puts most American buyers out of contention for GMAC financing, as the average credit score in the U.S. Automotive lending and mortgage firm GMAC has announced it will further restrict automotive financing by ceasing to offer any money to buyers with credit scores lower than 700.
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