Available Financing Helps Auto Sales Rebound
STEVE INSKEEP, HOST:
NPR's business news starts with some promising economic signs. The unemployment rate fell to 8.6 percent last month, though the growth in hiring remains slow and many people checked out of the labor market. Also last month, new vehicle sales increased. More people are getting auto loans, as NPR's Sonari Glinton more.
SONARI GLINTON, BYLINE: When the bubble burst on the housing market, it did the same with cars and almost killed off the industry. Credit dried up, especially for subprime borrowers. That has changed.
MELINDA ZABRITSKI: When you look at what's going on in auto financing, it is a very good time to buy a car.
GLINTON: Melinda Zabritski is director of Automotive Credit at Experian. She says compared to a few years ago, consumers don't have to put as much money down, rates are competitive, and more people can buy a car.
ZABRITSKI: People with lower credit scores, more challenged credit history, they might not have been able to get financing a few years ago, and we're certainly seeing more of them getting financing today.
GLINTON: According to Experian, 22 percent of the new car loans are subprime. Rebecca Lindland is with IHS Automotive. She says subprime borrowers have always participated in the new car market; the problem was, they were participating too much, just like in housing.
REBECCA LINDLAND: We went the other extreme where you can't get approved for anything regardless of how good your credit is, and now I think we're starting to come back to a more reasonable level.
GLINTON: Lindland says the pendulum has swung back, but not so far that consumers are getting approved for more than they can afford, at least not yet. Sonari Glinton, NPR News. Transcript provided by NPR, Copyright NPR.