This year, the rising interest rates, weak consumer confidence and a dull demand along with the fear of oil price rise still threatens the ‘just now sprouted’ recovery of lending loans for automobiles. “But, there is good news that the lenders have easier time in rising funds which is very important for a continued recovery”

We have to consider these factors as optimistic but the same time everybody is cautious about their move. Yes! It is ‘cautious’ and that is what the CEO panel at the American Financial services association for vehicle finance conference and exposition which held last month (February) in Orlando has mentioned. Clearly last year is a real transitional year, as it appears to be the bottom of the current business cycle.

When saying that lenders’ have a cash reserve, it doesn’t mean they are cash rich and sitting on a cash cow. They too borrow! They sell of the income from a package of loans to investors. Then the investors or lender’s lender will collect their money as the consumer’s pay it back. The auto lender gets the money upfront to make loans at the cost of sacrificing a part of the interest they would earn if the auto lender pays in installment. Even if the case is this way auto companies take a stride to regain what it has lost over the lost year.

When situation is like this it is hard to expect the lender to be very kind and favor the consumers every time. And this is why they expect their customers (consumers) to have a good credit history & score. So it is always important for the consumers to maintain their credit records in a proper way. If the credit score is not in favor of you, get advise and assistance from a consultant.

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