If you need further proof that the U.S. auto industry is recovering, here’s one more. It’s now easier to get a vehicle loan. Banks and other loan providers raised lending in the subprime market by 11.1% in the first quarter of 2011 compared to the same period in 2010.
New data from Experian Automotive show that credit-challenged consumers benefited as auto lenders loosened up and approved more new-vehicle loans. In 2011, job growth continued to go up and interest rates had dropped.
It can be recalled that in the 2008 banking crisis, U.S. lenders clamped down on credit to get risky loans off their balance sheets. In recent months, U.S. auto retailers have complained that there were still some difficulties getting some customer loans approved.
Melinda Zabritski, director of automotive credit at Experian, said that lenders have started to return to the market and they have displayed more confidence about customers they’d have considered too risky a year ago.
He added that the outlook is definitely improving. These new data are from Experian Automotive, a credit-reporting service that gathers credit and financial data.
Experian said that in the first quarter, the average consumer credit score on auto loans was 766 points, dropping from an average score of 776 in the same period in 2010. The 2011 average is the lowest since the economic collapse in the last quarter of 2008.