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Lack of Credit Forces New-Car Shoppers Into Used

For the first quarter of 2009, used-vehicle loans made up 68.13% of all auto loans. That’s up about 4% from last year. Used-car sales have increased as lenders have reduced the amounts they’re willing to lend thanks to stricter lending practices in the wake of the financial crisis.

Auto lenders may also be worried about the rising delinquency rates on existing loans and the deteriorating credit score of the average American consumer.

According to Experian Automotive, the number of auto loan payments delinquent for more than 30 days increased 11.3% year over year in the first quarter of 2009. Loans that are 60 days past due increased 19.5%.

Overall, however, only 2.48% of all auto loans are 30 days past due, but that percentage is increasing.

Credit scores have also deteriorated. The number of car shoppers considered prime creditors has decreased 2.6% since the first quarter of 2009, and the percentage of high-risk subprime borrowers has grown 6.03%, according to Experian.

In the first quarter of 2009, the states with the highest average credit scores for new-vehicle loans are Minnesota, Connecticut, Wisconsin, Iowa and Massachusetts.

New Hampshire, Connecticut, Minnesota, North Dakota and Wisconsin have the highest credit scores for used-vehicle loans, according to Experian.

Lack of Loans Pushing Buyers from New to Used (The Detroit Bureau)