If you’ve been shopping for an auto loan, you might’ve noticed things are getting tougher out there. For the fourth straight month, lenders have tightened their standards. That makes getting a loan that much more difficult for consumers.
As Marketwatch reports, the tightening of auto lending terms is tracked by Kelley Blue Book’s Dealertrack Credit Availability Index. The index crunches data from lenders to see if acquiring loans is getting easier or harder. In July, the index showed that loan approval rates declined, the average loan rate increased, and lenders were asking for a higher average down payment. The index did show that it was slightly easier to obtain a loan for a used vehicle than one for a new vehicle.
Even with the tightening loan standards, consumers appear to be set on buying cars. A separate report found that more Americans are planning on buying a new car now than six months ago.
If you’re undeterred by lenders’ moves, take some steps to make sure you get the best rate possible. The first move? Working on your credit score. Take a few months to get your score as high as possible by paying bills on time and reducing your overall debt. When you’re ready to get a loan, apply to at least three different lenders to get the best offer. Whatever offer you decide to go with, revise your budget so that it fits in and doesn’t put too much of a financial strain on you.