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Car loan challenges easing

By Tara Baukus Mello ·
Wednesday, September 7, 2011
Posted: 10 am ET

If you are a new-car shopper with less-than-stellar credit, the challenges of getting a good car loan rate are easing.

A new report from credit agency Experian Automotive notes that the number of car loans given to subprime car buyers is on the rise. In the second quarter of this year, 40.8 percent of new-car shoppers applying for a subprime auto loan received one, compared to 37.2 percent in the second quarter of 2010.

While getting a car loan with lousy credit is getting easier, it's still best to get your credit score up as high as possible before you buy a new car, as a lower interest rate can greatly reduce your costs of the car over the long term. For tips on improving your credit, read the Bankrate story "Fix your credit before seeking a car loan."

Regardless of your credit score, it's still a good idea to shop around for the best car loan rate. Start by talking to any lender where you currently have an account, because many offer incentives to current customers that can help save fees or even lower your car loan rate. Use Bankrate's Car loan rate comparison calculator to see which offers are the best deal for your situation.

Tara Baukus Mellowrites the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.

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