Weakened Credit Lines Have Eliminated 100 Percent Auto Financing Deals

January 13, 2009

In generous times, consumers were able to procure 100% financing on cars. This meant that they could get a good vehicle and pay for it without having to put forward a down payment. However, the economy has changed, and there troublesome times facing the automotive industry.

Credit lines have shrunk, and lenders have imposed strict standards for borrowers to follow in order to qualify for loans. Because of this and other financial problems facing the industry, there are pretty much no opportunities for buying a car without a down payment.

The days of financing a vehicle entirely are over. Consumers who wish to purchase a vehicle must provide a down payment in order to for lenders to agree to a loan. While this isn’t an attractive situation for people without a lot of cash to spare, it does mean that consumers who proceed with it are more likely to keep paying on the vehicles that they purchase. A vehicle that comes with an investment is one that an owner wants to keep.

Another thing that has changed is deals that involve trade-ins. Dealerships are no longer agreeing to pay off trades regardless of what the buyer owes. That sort of arrangement was the automotive industries’ equivalent of sub-prime mortgages, so it can be argued to make sense given the current economic climate.

These changes, while unfavorable, aren’t necessarily bad when one considers the options that are open still. Consumers with good credit can still apply for quality loans in order to purchase a vehicle, and others without stellar credit can find financing opportunities to suit their budget. Vehicles are generally cheaper too these days and dealerships are offering more incentives than ever in order to move stock from their inventory.

While automotive lending may change in regards to opportunities, terms and conditions, the option still exists and is a solid choice for people wanted to purchase a vehicle. Given that cars are cheaper and involve more benefits for buyers to acquire, it may be said that purchasing a car today is a great way to acquire some really good deals, regarding of financing.