Auto Loan Market Feels Squeeze

With the housing market slowly spiraling downward, many other areas of finance are starting to feel the squeeze as well. The auto loan market has been particularly vulnerable to the economic situation. This is making getting auto loans harder and making them less available.

Some people who go looking for an auto loan that would have previously qualified for one, are finding themselves not being able to get one – not even one for less money than they were planning on spending. You go in for an SUV and end up with a compact as the car loan you wanted you didn’t get.

Many lenders are only giving car loans to customers who are able to give large down payments and take shorter auto loan terms. The crunch can really be seen in companies like CitiGroup – who have already let go more than 800 employees in their auto loan division, and say that they will also be offering fewer types of car loans.

Some like JP Morgan Chase are only allowing those with higher credit scores to get the better car loans, and those with average ratings are looking at large down payments and a max of six years for the life of the loan. This is adding to an already low sales year – making it very tough to survive.


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