The auto loans for customers are increasing, as low interest rates help banks to get money cheaper.
Loans are especially attractive for customers with credit scores of 679 or lower, called subprime buyers, as banks can charge higher interest rates. The interest rate for a deep subprime loan (the credit score under 550) for a new car is 12.9%, and for buyers with bigger credit scores is 3.2%.
“Consumer spending is still very conservative. People aren’t going hog wild like they did before the recession,” said Lacey Plache, chief economist for the auto information site Edmunds.com.
Here are the loan rates and estimated monthly payments for buyers that want to purchase a new or used car, on a 5-year loan if they trade in a car worth $5,000 for a new, fully loaded $24,775 Toyota Camry sedan.
For the Super prime, with credit score of over 740, loan rates are around 3.2% for a new car and 4.4% for a used one. The monthly payment would be $357. For Prime (680-739) loan rates are 4.5% for a new vehicle and 6.4% for a used one, with a monthly payment of $368. For Nonprime (620-679) the loan rates are 6.5% for a new car and 9.5% for a used one, with monthly payments of $386. For Subprime (550-619) the loan rates are 9.9% for a new car and 14.4% for a used one. The monthly payment is $419. For Deep subprime (549 or lower) the loan rates are 12.8% and 17.9%, while the monthly payment is $447.