Consumers who have bad credit or have seen their credit scores nosedive during the recession due to foreclosure or any other kind of credit default may find it’s not that difficult to get a car loan anymore.
Lenders specializing in bad credit auto loans say that a two-year industry freeze seems to be over, the Orange County Business Journal reports. Consumers with lower credit scores actually were approved more in the fourth quarter for the first time in more than two years, according to Experian Automotive.
Consumer Portfolio Services Inc. and United PanAm Financial Corp., both of Irvine, Calif., are beginning to make more car loans after fighting for survival during the recession. The subprime auto loan industry is dominated by Fort Worth, Texas-based AmeriCredit Corp. and McLean, Va.-based Capital One Financial Corp.’s auto finance arm, the Orange County Business Journal reports. Smaller subprime auto lenders are still out there and ready to approve auto loans though.
The Orange County Business Journal spoke with former PanAm chief executive Ray Thousand. Thousand said he is so optimistic about an impending recovery that he’s planning to get back into subprime auto lending. His new company, Alliance Acceptance Corp., will open this week.
“We’re going to start out small, hiring up to about 10 people, and then slowly grow our loan portfolio over the next year,” Thousand said.
“It’s a very good time to get back into the business. The number of competitors has thinned and there’s a lot of pent-up demand in the market.”
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