“People are starting to feel a little bit more comfortable from a consumer standpoint ... and more money is available,” said Jeff Quayle, senior vice president and general counsel for the Ohio Bankers League.
Many borrowers hit hard by the recession have begun to recover and rebuild their credit scores by paying down debt and spending less, which in turn has made them more attractive to lenders, Quayle said.
Nationally, auto loan originations were up 19 percent last month year-over-year — the largest increase since the recession began in December 2007, according to credit reporting agency TransUnion.
That coincided with an increase in total light vehicle sales from 746,104 units in September 2009 to 958,966 last month, according to Autodata Corp.
“I don’t know that it’s a lot easier” to get a car loan, said Jamie Brown, general sales manager at Matt Castrucci Auto Mall in Miami Twp. “But we’ve definitely seen a trend where a lot of the lenders right now are stepping back up and approving a lot more loans than they did a year ago.”
Brown said much of the new business is coming from credit unions rather than traditional banks, whose lending standards are more strictly tied to credit scores.
Borrowers with credit scores below 619 are generally considered subprime borrowers and historically have been hit with the highest interest rates on loans.
Brown said interest rates on car loans for those with scores in the 600s ran as high as 20 percent a couple of years ago. Today, it’s not uncommon for car buyers with similar credit profiles to land rates as low as 4.9 percent, he said.
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