Car Finance From Dealers Continues To Grow

According to the latest figures from the Finance & Leasing Association (FLA), dealer car finance is still the most popular option for new car buyers.

Between January and November 2011, 61.5 percent of new car buyers used dealer vehicle financing. This was nearly a ten percent increase from the 2010 figure.

Dealer financing resulted in a six percent increase in number of new vehicles and four percent increase in number of used cars purchased year-over-year during November.

FLA head of motor Finance Paul Harrison commented that these figures reveal how important dealer-provided financing is for new and used car buyers.

He attributed the popularity of this option to the “range and flexibility of the products.” Providers are able to offer excellent deals on car loans and leases due to the secured aspect of this financing.

Despite this positive trend, not all car buyers qualify for dealer financing. Those with the most impaired credit usually must look elsewhere.

For them, lenders specializing in bad credit car finance are often the best choice. They often must pay higher interest rates for these car loans. However, repayment according to financing terms is a way to improve the credit score.

Drivers with poor credit history should comparison shop for the lowest rate loan available. Rates may vary based on loan amount and repayment period.

If credit is questionable, the individual is usually required to make a down payment. Car buyers who are able to make a sizable one may find more attractive financing deals.

How the car finance industry fares during 2012 will hinge on consumer confidence, said Mr. Harrison. According to market experts, finance rates are the lowest they have been in years, increasing the chance that car buyers will find a good deal.

New car models are more reliable and efficient, enticing many drivers to upgrade their vehicles.