How the credit crisis affects you: Good luck getting a car loan

It's a brand new world out there. Time was, just a few short years ago, getting a loan for a brand new car was just about as easy as showing up and filling out the paperwork. The banks, flush with all that mortgage money, didn't mind taking a risk on small change like auto loans. Indeed, it was almost as easy as getting a mortgage.

No longer. Now that the banks are in crisis mode, getting a car loan has become something to sweat over, especially if your credit is less than sterling.

According to a blog called Kicking Tires, dealers around the country are reporting that dramatically fewer people qualify for a car loan, and even those few with excellent credit are finding the interest rates of the loans they qualify for are higher than they expected.
"Gas at $4 a gallon changed the type of vehicles people buy. The credit crunch, however, has changed their ability to buy," Bill Stasek, a Wheeling, Ill., Chevy dealer told the blog. "When they do get approved for a loan, sometimes it's for less money than they wanted."

General Motors marketing chief Mark LaNeve, says that GM alone is losing up to 12,000 sales a month because of credit problems. Chrysler and Ford are suffering as well, though their numbers appear to be lower, according to the blog.

Even the so-called "captive" sources of auto financing, usually more aggressive in funding loans for their customers, have pulled back because of the system-wide credit crunch.

What's the mean for you, the hapless car buyer? It means one of two things: Clean up your credit so you're more attractive to the few outlets that are still making car loans, or save up the cash to buy.

And here's a third option, almost unheard of in America in the last decade: Stay with the car you have. Even when that new-car smell is a thing of the past.
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