Events Calendar
In This Section
Most Read Stories
Akron judge Linda Kersker dies
DiLullo's closes doors after 63 years
Portage man beaten at home, robbed of coins
Akron police arrest murder suspect within an hour
Call center to cut 250 jobs in Akron
Rib, White and Blue is festival of tastes
Man fit for trial in rape of girl, 2
UPDATE: Deadly motorcycle crash closes I-76
Blogs:
Pets:
Summit teams up with Rescue Waggin' to save dogs
The Heldenfiles:
I Hate "More To Love"
Patrick McManamon:
Ron Artest goes to the Lakers
Akron Zips:
Opponent outlook: Northern Illinois
Browns Bulletin:
Single-game ticket sales begin July 11
Tribe Matters:
Tribe needs to slow down opponents
Cleveland Browns:
Stallworth test showed marijuana
Kent State Sports:
Men's Basketball Scheduling update
Cleveland Cavaliers:
Updated: Free Agency: Another Gone - Apparently
All Da King's Men:
IPCC Already Wrong About Global Warming
Blog of Mass Destruction:
Wow….Sarah Palin Resigns Governorship
Akron Law Café:
Abraham Lincoln and the Fourth of July
Varsity Letters:
Highland senior receives honor
See Jane Style:
Picnic Wear
Car Chase:
Where do We Go from Here?
Let's Talk Real Estate:
Hate Crime in Fort Worth Texas: "That F***t had it Coming"
Ohio Travels with Betty:
Linda asks-where is the Ohio Chautauqua?
Sound Check:
Rundgren fans rejoice!: Second night of AWATS at The Civic added
HRLite House:
Sport Psychology and Performance Consulting
Akron Gamer:
Hot link: Best of Nintendo at E3
Auto dealers say loans tougher to get, but still available, and leasing continues to suffer
By Dave Scott
Beacon Journal business writer
Published on Wednesday, Oct 01, 2008
The credit crunch that's rocked stock markets can affect your ability to get a car loan and what you pay.
Auto dealers say loans are tougher to get, but are still available. They also say the leasing business that began changing a year ago is still suffering.
''We have lost some sales,'' said Ron Stease, general sales manager of Ganley Toyota Scion and Mercedes in Akron. ''Not a significant amount, but I had a couple of [lost] deals a week ago that would have worked a couple of weeks ago.''
Bank policies also are affecting the kind of deals that are made.
Stease said the practice of financing larger amounts than the sticker price of the car is nearly dead. In the past, a person trading in a car could roll money owed on the old loan into the new loan. The result might have been a $22,000 loan on a new car worth $20,000.
Now, only the most credit-worthy customers can do that, he said.
''It's just a matter of [banks] not buying negative equity,'' Stease said.
''The banks have seemed to be tightening up,'' he said. ''But the banks seem to be giving loans to those with good credit.''
By that, he meant buyers with credit scores of 700 or above have a good chance of getting a loan. He described that as an average to high-average score.
Gary Adams, president of the Greater Cleveland Automobile Dealers Association, said he hasn't seen those problems. He said a 700 credit score will get a consumer close to the best loan rates.
Based on his conversations with area dealers, ''People aren't having trouble finding car loans right now,'' he said. ''I can't predict if that is going to be a true story a month from now or six months from now, but as of today, that is not an issue.''
Michelle Primm, managing partner at Cascade Auto Group in Cuyahoga Falls, said she has not seen any deals fall through because of new credit-rating standards.
''What has changed is banks are doing a better job of asking for proof of income, et cetera,'' she said. That means verifying facts, especially if conflicts in the credit application raise red flags. If you no longer look like the picture on your driver's license, if you have conflicting addresses on documents, if a call to your employer reveals you don't work there anymore, more questions will be asked and you might not get the loan.
All of that is because of tightened identity theft requirements, and it can slow a person's ability to get a loan.
Lease trouble
Primm said many customers have more trouble getting leases. Some banks and car makers have exited that business entirely. She said those companies made mistakes estimating the value of cars coming out of leases, lost money and stopped making the deals.
''For us, I'm gonna say our leasing has reduced by just a few
percent, not a lot,'' she said.
Because leasing is more difficult, she said her used car lot is doing well with former lease customers who can't afford new cars and are turning to newer used cars.
Jimmy Wallace of Wallace Lincoln-Mercury in Barberton is having the same experience.
''Low-end cars are selling quite well,'' he said.
He described his new-car customers as older and more affluent buyers who have no trouble getting loans, so his Mercurys and Lincolns are selling OK.
''It's kinda strange,'' he said. ''We sell the $30,000 luxury cars and a lot of the low-end used car on the same lot.''
Not all dealers have seen loans and leases go sour.
Bob Ringo, managing partner at Classic Honda in Streetsboro, said he has had no problems with loans because Honda provides much of his financing, including a continued commitment to leasing.
''What we have seen is a slowdown in traffic because people are very unsure of what's going on out there,'' he said.
Overall, car sales were down during the summer.
The dealers association reported 16,640 vehicle sales in August, down from 21,565 in August 2007, a 22.8 percent decline.
''Business is down, as it has been for several months,'' Adams said. ''The downturn of the automobile business probably started with the downturn in the housing markets.''
He said loans are still available, but might be more expensive.
''What banks have done a little bit . . . they are kind of raising the bar on that credit score to qualify for that best available rate, but it does not mean people with lower scores cannot get a loan at all.''
Dave Scott can be reached at 330-996-3577 or davescott@thebeaconjournal.com
The credit crunch that's rocked stock markets can affect your ability to get a car loan and what you pay.
Get the full article here.
Comments
Click here to post your comments
Posted 05:29 AM, 10/01/2008
and when have you ever heard the whole truth from a dealer of anything? always remember the part of looking the gift horse in the mouth.
Barberton, OH
Posted 06:12 AM, 10/01/2008
Yeah, OK. They will find a way around it, I'm sure. Car salesmen are some of the biggest liars out there anyhow....well, next to politicians.
akron, oh
Posted 07:21 AM, 10/01/2008
i wonder if the people quoted in the article had to "go check with their managers to see what could be worked out" before commenting?
Akron, OH
Posted 07:26 AM, 10/01/2008
I disagree with Steve about car salesmen being liars. The ones I have dealt with haven't been knowledgable enough about the cars they're trying to sell to be able to lie about them. I would say that they just make so many mistakes and give incorrect information to the point that we just assume they are doing it on purpose. Most of them really don't know what they are talking about.
Akron, OH
Posted 07:40 AM, 10/01/2008
Sleazy business with sleazy people. There are a few businesses where even if you become a millionaire at them, you will always be perceived as trashy: Repo man Bounty hunter/bail bonds Car sales Sanitation
Posted 09:15 AM, 10/01/2008
Problem is two-fold...first, lots of people buying new cars are so much in debt, they have no business taking on more debt. second, half the crap on the new cars isn't necessary...do we really need sattlelite radio, adjustible headlights, mp3's, refrigerators, etc in cars...?
Posted 09:16 AM, 10/01/2008
Try Park Honda...very very good service and good sales force, no I don't work there.
Stow, OH
Posted 12:55 PM, 10/01/2008
It's funny how the whole country is in an uproar over bad loans,but car people have been doing this to people for decades.Everyone on here has been screwed by a car dealer more than once and if you think you got a "deal " you are seriously in denial.
Sterling, Oh
Posted 03:22 PM, 10/01/2008
Victims accountable to pay property tax on their American Dream and pay property tax, tax abated automobile manufactures neglect to market tax cost and consumers paying for the more stock dividends (money) investors and stockholders (money marketers) in the automotive industry market quarterly in the wholesale and retail price of automobiles. Of workers, consumers, and taxpayers paying with money derived from wages or independent business profit. Makes automobiles UNAFFORDABLE in the USA!
akron, oh
Posted 04:21 PM, 10/01/2008
This is a stupid story by the liberal ABJ. People without good enough credit SHOULD NOT be given more loans in the first place.
Posted 09:31 PM, 10/01/2008
The leasing business is down, haha, great. Leasing should be illegal. It's nothing but predatory lending to those that can't afford outright payments, and when it it time to turn the vehicle in, the bank inspects it and wants to charge inflated charges for every little thing that are hardly fair charges and the only option the person turning in the vehicle has is to challenge the charges in court.
