Customers speak with a salesman at a new car dealership (image credit Kevork Djansezian/Getty)
McLean, VA (written by Chris Woodyard/USA Today) -- It's finally getting easier to get a car loan. Experian Automotive just announced that the average credit scores required for consumers to buy a vehicle have dropped to near pre-recession levels.
The average credit score for financing a new vehicle dropped six points to 760, and dropped four points to 659 for used vehicles. By contrast, credit scores required in the first quarter of 2008 were at an average of 753 for new vehicles and 653 for used.
Experian's analysis also showed the average amount financed on new vehicles rose by $589 in the first quarter, to $25,995. For used vehicles, the average amount financed increased by $411, bringing the average total to $17,050.
Some lenders are even wandering back into a subprime. CNW Research reported that over the three-day Memorial Day weekend, subprime lending was up 15% over the same period last year. Subprime loans go to customers who are deemed higher credit risks.
Besides being looser with their money, lenders are also able to offer low rates. Interest rates were lower year-over-year, and loan terms were longer, giving consumers access to potentially lower monthly payments, says Experian. The average interest rates fell to 4.56% on a new vehicle and to 9.02% on a used one. Average loan terms also increased, extending by one month for new and used vehicles to a total of 64 and 59 months, respectively, the service adds.
"During the first quarter of 2012, car shoppers definitely found more favorable conditions for their vehicle loans," said Melinda Zabritski, director of automotive credit for Experian. "A reduction in average credit scores, lower interest rates and a lengthening of loan terms are all very good signs for the market and offer great opportunities for consumers looking to make a deal on a new or used vehicle."