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Dealers, banks say folks who want a car on credit shouldn't worry
By Jim Mackinnon
Beacon Journal business writer
Published on Sunday, Oct 12, 2008
Bob Serpentini is among the auto dealers in Northeast Ohio who will tell you, contrary to popular opinion fueled by the continued terrible international economic news, that it is still easy for most people to borrow money to buy a car.
The 51-year-old head of Serpentini Auto Group in Strongsville says he suspects many people who can qualify for a loan are sitting on the sidelines in light of the financial storm that is battering businesses and the stock market and forcing unprecedented government action.
''It's a huge myth there's no money to lend,'' Serpentini said. ''There are still bankers that want to loan money.''
Naturally, Serpentini, along with his colleagues and competitors in Northeast Ohio, want to see a lot more loans being made and vehicles driven off their lots in what is shaping up to be a weak year nationally for new vehicle sales.
For a 21-county region of Northeast Ohio, new car and truck vehicle sales in September fell 5.9 percent compared to a year ago, according to figures released last week by the Greater Cleveland Automobile Dealers' Association. The Akron Area Automobile Dealers Association, whose members overlap with the Cleveland group, reported that new and used sales fell by a similar percentage for the month.
By contrast, sales nationally for the month fell 27 percent, and for the year are projected to hit just 13.8 million units, down from about 16 million in 2007. That would be the lowest national sales in almost two decades. The National Automobile Dealers Association has projected that as many as 600 of the nation's more than 20,000 dealers could go out of business as a result. A recent study by consulting firm Grant Thornton LLP, meanwhile, said that if sales remain in the 13 million range, as many as 3,800 dealerships could close in 2009 for the remainder to stay economically viable.
And of course, it's not just vehicle sales that have been hurting.
With investors selling stocks, the fall in value of the nation's automakers has been nothing less than breathtaking. General Motors stock, for instance, plunged by 30 percent last week to a level not seen since 1950.
Still, that hasn't completely killed optimism among the Northeast Ohio dealers.
Rich Klaben, who runs the Klaben Auto
Group based in Tallmadge, said the current climate is tough but an economic recovery will come.
''It's not the doom and gloom everybody paints. It's not what we would like,'' he said. ''Have we tightened the belt? Absolutely. Every business has.''
But Klaben said Northeast Ohio has already weathered the kind of restructuring and economic slowdown that much of the rest of the nation is experiencing.
Echoing Serpentini, Klaben said the perception of tight consumer credit is bigger than the reality.
''Our biggest concern now is that too many people are thinking [credit] is tighter than it is,'' he said. ''It's the indecisiveness or lack of confidence in the market. . . . We're all paying a price.''
Qualified people might have to come up with a larger down payment or pay a slightly higher interest rate, but the loans are available, Klaben and others said.
Bankers say they do have money to lend.
Stephen Hailer, head of North Akron Savings Bank, said that while his business does not do a lot of vehicle loans, credit is available.
''We'd be happy to make qualified car loans to people,'' he said.
Dan Buck, who bought a Chevrolet dealership about two years ago in Canal Fulton, said his business is doing fine.
The banks he uses to provide financing to customers continue to have money to lend, he said. ''My banks have not slowed down.''
September was the dealership's fourth best month in 2008, he said. It wasn't until early this past week that Buck said he noticed a drop in business compared to a year ago.
''We just keep coming into work every day,'' Buck said. ''There are still customers out there who need good quality cars.''
Buck said that when he started his business two years ago, the local economy was slow.
''I'm used to a down market,'' he said. ''My employees' skill sets are very high. These people here have seen it all and know how to get through it.''
Serpentini said his sales were up in September compared to a year ago.
Business has been strong enough that he said he decided to expand on a fundraising program that he started six years ago to help St. Vincent-St. Mary High School in Akron. Each year, Serpentini donated a car to the school, which in turn raffled the vehicle to the public.
This year, Serpentini decided to donate seven 2009 Chevrolet Malibus to seven area high schools for raffles. ''We're trying to make an impact on the communities we do business in,'' Serpentini said.
And in the meantime, Serpentini said, he's going to continue to aggressively market his dealerships and bring in customers.
''You have to let people know you have inventory,'' he said. ''I don't believe we won't get through it and come out stronger. And hopefully smarter.''
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
Bob Serpentini is among the auto dealers in Northeast Ohio who will tell you, contrary to popular opinion fueled by the continued terrible international economic news, that it is still easy for most people to borrow money to buy a car.
Get the full article here.
Comments
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Posted 06:24 AM, 10/12/2008
Bob. You are wwwwwrong. Nobody wants a loan cause nobody has any money to spend or are afraid to spend more than they have.
Posted 09:11 AM, 10/12/2008
Now is the best time to buy a new car.... I think i have heard that every week for the past 10 years.
Posted 09:47 AM, 10/12/2008
What happened to all of Bob Serpentini's Political ads....??? I used to listen to them and laugh. That guy was a hoot....
Bring back those ads bob we could all use a laugh.
Posted 12:33 PM, 10/12/2008
aint nothin to giggle bout right now even if we all would like to smile more
Stow, OH
Posted 12:41 PM, 10/12/2008
Last year ,my wife and i took her Toyota4 Runner in to a dealer to see what they would give us on a trade in .After their so called mechanic drove around the parking lot ,he sheepishly hands the salesman an estimate claiming "soft brake pedal "i'll give you $5000. That was 17 months,and 20,000 mi. ago and glad we got insulted and left.As far as i'm concerned ,i hope the herd gets thinned out a little more.