— Car dealers tend to offer their best deals right
around the holidays, and in recent weeks PNC Bank has
been pushing the gas pedal on a loan program that allows
buyers to get pre-approved for a specified loan limit
and then go shopping for the car they want as if they
were cash buyers.
loan, called the Check Ready program, is geared for
people who plan on buying a car in the near future and
want the certainty of having their financing arranged in
advance. Consumers can apply for the loan either online
or at a PNC branch without specifying what car they want
15 minutes of applying for the loan, the car buyer will
get an answer, and if approved, PNC will send them a
blank check overnight or they can pick it up at a bank
for car buyers’ business is vigorous. Other banks and
lending institutions also have been pushing auto loans.
Drury, a senior analyst at Edmunds.com, said lots of
financing deals are available right now — such as
Chrysler offering zero percent financing for seven years
— and that has been enticing people to come back into
the market even if they have old car loans that are
currently under water.
said so far in 2016, about a third — 32 percent — of
all trade-ins toward buying new cars were worth less
than the outstanding value of the old loans. That’s
the highest percentage of underwater car loans on record
since the Santa Monica, Calif., auto industry
information service began keeping track in 2002.
said the average underwater car buyer is upside down on
his existing vehicle to the tune of $4,832 — another
a two-fold effect," he said. "People are
financing cars over longer cycles. Over the last decade,
people have been financing cars for longer periods of
time — from about five years to seven years now.
People still want a new car within the same five-year
time frame and they end up with negative equity. But
they figure they will roll the negative equity into a
new car loan and pay it off."
aren’t the only ones offering incentives near the end
of the year, said Greg McBride, chief financial analyst
for Bankrate.com based in New York. McBride said he is
aware of many credit unions also running specials on
auto financing around the holiday season.
best to shop around," he said. "It’s also a
good idea to have your own financing in place. That way
you are not beholden to the dealer. You don’t have to
accept whatever financing the dealer offers."
PNC has been ramping up the visibility of its program
through its PNC.com website. Officials say the bank also
has a social media marketing plan for Check Ready.
Ready is a program that was actually developed at the
former Cleveland-based National City Bank. PNC inherited
the program in 2008 when it purchased National City for
$5 billion following National City’s loan losses
during the subprime mortgage crisis.
product has existed for some time. But we enhanced our
underwriting process to speed up the approval
process," said Chris Dervan, a senior vice
president at PNC Bank in charge of consumer lending. He
added that the loans are for personal automobiles only.
They cannot be used for commercial vehicles, trailers,
boats, motorcycles or RVs.
minimum loan amount is $7,500. The maximum loan amount
is $50,000 and the loans may only be used for vehicles
up to eight years old.
PNC officials said the bank wants to increase its
automobile loan portfolio, they declined to say what
share of its loan business comes from the automobile
loan division. According to PNC Bank’s third quarter
2016 earnings report, total loans grew $1.4 billion to
$210 billion. Total consumer lending increased $300
million due to growth in auto, residential mortgage and
credit card loans.
bank chose to highlight the Check Ready program at a
time of year when auto dealers tend to offer the best
of the top reasons auto dealers are willing to sweeten
the pot for car buyers during the holidays is because
they need to get rid of the current year’s car models.
and car makers are clearing out their inventory to make
room on showroom floors for the incoming models. Dealers
also are trying to improve their sales numbers at the
end of the year, according to CarsDirect.com.
said interest rates on the Check Ready program are
subject to change, which is why he declined to give
rates are different for different customers," he
strive to make the rates competitive with what a
customer could obtain from an auto dealer."