Stringent loan requirements during the worst of the recession shut out many buyers with poor credit, resulting in an inflated high average credit score for new car buyers, peaking at 776 in early 2010.

But an Experian Automotive credit analysis recently showed that more buyers with poor scores are now getting approved, and their scores are lowering the average to close to pre-recession levels. For new car buyers, the average score was 760 in the first quarter of 2012, just a few points higher than for that time period in 2008.

According to Experian Automotive's report on automotive financing for the quarter ending March 31, this is what's happening:

  • Buyers with lower scores are getting approved. The average credit score for financing a new vehicle dropped six points to 760 and, for a used vehicle, fell four points to 659.
  • Lenders are making more loans. The report found that loans to car buyers with nonprime to deep subprime credit scores (from 679 to 550 and below) increased by 11.4%.
  • Buyers are getting bigger loans. The average loan amount for a new vehicle went up to $25,995, about $589 higher than the previous year. For a used vehicle, the average went up by $411 to $17,050.
  • Lenders are offering lower monthly payments. Low interest rates - an average of 4.56% for new vehicles and 9.02% for used vehicles - combined with longer loan terms can make payments more affordable, says Melinda Zabritski, director of automotive credit at Experian Automotive.

The changes have been fueled by the fact that more consumers are paying back their loans as agreed, experts say. According to the report, the number of loan payments that were 30 days late dropped by 7.6% and those 60 days late dropped by 12.1%. Also, vehicle repossession dropped by 37.1%. 

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