The Challenges of Obtaining Car Loans in a Cautious Lending Market
While more cars are becoming available and prices are stabilizing, potential buyers are facing challenges in obtaining auto loans. The rejection rate for auto loans has risen to its highest level since 2013, with lenders becoming cautious due to borrowers' struggles with inflation, interest rate surges, and increasing debt. The market for auto financing is experiencing a rise in delinquency and default rates, leading to concerns about negative equity. Many lenders have scaled back or eliminated auto lending, further limiting options for consumers and potentially increasing interest rates. To navigate these challenges, consumers are advised to consider alternative financing options and be mindful of the overall cost of the loan, including the APR.