BANDON, Ore. — While some automaker captives say that their criteria remains the same for approving auto loans, CNW Research reported this week that there are, indeed, some differences.

Apparently, these financial institutions have altered the number of loans that fall into each credit tier.

"Don't let the buzz fool you," Art Spinella, of CNW, said this week. "Creditors are indeed requiring better FICO scores for new-vehicle buyers than just a year ago. They'll still take FICOs under 660, but not as many."

Basically, reviewing the 10-month data on lease and finance buyers, CNW found that the average approved FICO score inched forward by more than 4 percent to 707 from 679 in 2007.

"Interestingly, but not surprisingly, the average FICO score for those who select lower-cost vehicles have increased the most," Spinella highlighted. "For budget and economy cars, the necessary credit score has gone from the low 600s to the middle and upper-middle 600s — roughly 7 to 8 percent increase since 2007."

Additionally, he explained, "Granted some of the increase is due to fewer low-score consumers even attempting to buy or lease a new vehicle, but the data is clear: Among approvals, scores are higher."

Looking specifically at leasing, Spinella discovered that when broken down by FICO score, lower credit levels generally mean higher rates of excess wear and tear when a unit comes off-lease. This analysis is based on wholesale repair costs.

"For example, thus far in 2008, 12 percent of leased vehicles among lessees with FICOs between 650 and 700 have an average of $451 worth of damage at the end of term," he indicated. "At the other end of the scale, those with the highest FICO scores return only 3.7 percent of vehicles with excess wear and tear with damage averaging less than $300."

Spinella went on to explain that there are many reasons for downsizing the number of lower FICO-scored customers.

"First, as portfolio protection against poor economic times. But also, as leasing shows, to maximize the resale value of off-lease cars and trucks by limiting the amount of reconditioning work necessary before auction," he said.

"While not widespread, talk of a General Motors or Chrysler bankruptcy filing has lenders skittish about long-term values for any products that could eventually be from a defunct automaker," Spinella pointed out. "Finally, and this is critical, there is little likelihood lenders will return to their former ways and begin loaning to subprime buyers."

Fascinatingly enough, consumers appear to understand this. Spinella concluded by saying that nearly 80 percent of Americans indicate they are actively trying to improve their credit scores by paying down bills, eliminating credit cards and getting their books in order.

CNW broke down the changes in approvals on FICOs year-over-year:

Budget Car

2008: 689, versus 613


Economy Car

672, versus 621


Entry-Level CUV

702, versus 686


Entry-Level SUV

691, versus 659


Full-Size Pickup

713, versus 642


Full-Size Van

734, versus 702


Hybrid Car

762, versus 744


Hybrid Truck

758, versus 731


Luxury Car

772, versus 769


Low Mid-range

715, versus 684


Low Mid-SUV

724, versus 689


Large SUV

745, versus 716


Mid-range CUV

711, versus 703



713, versus 692



746, versus 723


Premium Car

786, versus 767


Premium CUV

792, versus 754


Premium Mid-Range Car

759, versus 741


Premium Sports Car

792, versus 777


Premium SUV

795, versus 764


Standard Mid-Range

731, versus 714


Small Pickup

694, versus 637


Sport Utility Pickup

788, versus 754


Touring Car

761, 725


Traditional Car

734, versus 726


Ultra Upscale Car

831, versus 830


Ultra Luxury Sports Car

842, versus 826


Upper Mid-Range SUV

749, 734


Upper Premium Sports Car

829, versus 811

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