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