Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jan 12, 2012

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Those considering a new vehicle purchase in this upcoming year won’t need to worry about a long, grueling application for a car loan, nor will they need to worry about their wounded credit score that resulted from delinquent mortgage payments. Instead, experts are predicting auto loans will be much easier to obtain in 2012.


Part of what’s contributing to this prediction is this year has shown the highest amount of U.S. auto sales since 2008. And since buyers are continuing to be lured into purchasing new vehicles with cheap car loans, those sales are expected to keep soaring.


“Financing will continue to be very, very affordable for most buyers,” said Alec Guitierrez, senior market analyst for Kelley Blue Book to the Detroit Free Press. “You might actually have better than you thought with zero percent.”


Such low financing deals may not be accessible to those with poor credit, but even those individuals without pristine credit are finding plenty of auto loan opportunities. In fact, according to Experian, new car financing to those with credit scores of less than 680 was up an astounding 14.8 percent in the last quarter of 2011 when compared to 2010’s third quarter.


“The credit spigot for auto loans isn’t as open as it was prior to the crash in the auto market, but it is opening,” said Mark Zandi, chief economist for Moody’s Analytics, reported the Detroit Free Press.


To support Zandi’s statement, more than 1.7 million more car loans were issued in first three quarters of 2011 when compared to that time period of 2010.


“Very Creative Financing”


Since rates are continuing to fall, and auto loan lenders are standing with open arms welcoming subprime borrowers, some believe financers will begin to try to administer extra fees to extract more money from borrowers.


“I’m expecting them to try to do some very creative financing,” Michael Moebs, economist and CEO of the research firm Moebs $ervices, told the Detroit Press.


Moebs pointed out a 36-month lease that came with a 4-year maintenance deal being offered by Lincoln. The economist believes this deal is being offered with the intent of getting a borrower to re-lease the vehicle after 3 years in order to receive the remainder of the maintenance deal. Much like how hotdog and hotdog bun manufacturers provide an unequal amount of dogs versus buns—Lincoln is stagnating their deals, hoping to lock borrowers in on a recurring cycle of purchases.


Aside from creative financing schemes, borrowers should be wary of hidden car loan fees that may emerge in this upcoming year.


“Make sure that you look at the fine print,” Moebs advises prospective car buyers.


When comparing auto loans, shopping online and receiving multiple quotes from multiple lending sources is a great way for borrowers to ensure they’re receiving the best deal. Then, if hidden fees are present, a borrower should be able to notice the difference when the spread of offers are set side-by-side.