Credit crisis tough for car dealers

Thursday, October 2, 2008

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Lou Mihalovics is shopping around for a new car in Clearwater.

PINELLAS COUNTY Bay News 9) -- If you're considering buying a new car and you need a loan to do it, you'd better have good credit and money for a down payment.

Lou Mihalovics is shopping around for a new car. He says he's not sure when he'll buy but he knows what he wants.

"I'm seeing what's available," he said. "If there's a car they make here that gets good gas mileage and is not too expensive."

Mihalovics isn't the only looking but not buying. A new report shows a dramatic drop in car sales.

Ford is hit the hardest. Sales are down more than a third. Chrysler sales are down 33 percent. General Motors dropped 16 percent. Toyota had a more than 32 percent drop in sales. It's the company's worst in 21 years.

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Clearwater car dealer Paul Lokey says part of the problem is that loans are harder to come by even for people with good credit.

"The difference is people with good credit might be asked to put a $1,000, $2,000 down when before they would put nothing down," Lokey said. "Marginal credit, people even more money down. People with poor credit who were financed in the past are not getting financed."

Lokey says he doesn't see a turn around in sales until the feds deal with the credit crunch.

A traditional alternative to buying a car is leasing a car. Lokey says domestic auto makers are essentially phasing out their lease programs. But he says you can still get a pretty good lease deal on many imported models.

Mihalovics says he's only looking to buy but not right now.

"I think I'm just going to wait it out and see what happens in the senate and that's about it," he said.