The era of easy auto loans has come skidding to a halt.
Mortgages were among the first consumer products to be hit by the credit-market freeze. Now car loans and leases are drying up as dealers, auto-finance companies and other lenders are having trouble finding money to lend to car buyers. The upshot: Those with less-than-stellar credit are getting shut out of loans, and even some so-called prime borrowers are having trouble getting financing.
"You have to just about be walking on water to get financed," says Mike Jackson, chief executive of AutoNation Inc., the largest U.S. chain of dealerships. He added that the subprime market is "basically almost closed" but "even with our prime customers, banks are looking for a reason to say no."
AutoNation dealerships sold 532,862 light-duty cars and trucks last year, and this year, amid the credit crunch, that number could fall by as much as 20 percent, Jackson says.
2008 Paris Auto Show
2009 BMW 7-Series
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