Buying Cars in a Credit Crunch

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You'll never find a better time to buy a new car... but you'll never find a worse time to try to pay for it. Three ways to finance a car during a credit crunch...

Empty showrooms can mean great deals for consumers… if they can find a way to finance a car. Because many traditional lenders, like General Motors Acceptance Corporation, have slammed on the brakes.

“Auto financing right now is extremely tight, the banks give you every reason to say no. Acceptances in December and January were down 90%, so it’s hard to call them the acceptance corp if they aren’t accepting any loans.”
-Marc Cannon, Senior VP of Communications, Autonation

But despite the credit crunch, where there’s a wheel, there’s a way. For example, many credit unions are begging for borrowers.

“Credit union’s a good options because we have the money to lend, we’re not in that financial situation as a lot of the other institutions.”
-Nancy Dultz, President/CEO, Sentinel Graphics Credit Union

So credit unions are one option. Been with the same bank for a long time? They might also be amenable, especially if they’re a small local bank rather than one of the big nationals.

Another option is to show up at the deal with cash by borrowing against your house. If your credit is good… and you’re lucky enough to have equity, rates are low… and loans against your home can be tax deductible.

And a final option? Wait for help from a government bailout:

“TALF, which is happening right now is something that’s going to allow more credit to get back into the marketplace. It’s gonna allow financial institutions the ability to give out those loans again, it’s gonna free up credit.”
-Marc Cannon, Senior VP of Communications, Autonation

Bottom line? If you’re in the market for a new car, there’s never been a better time to get a deal. And if traditional sources of financing are driving you crazy… switch gears and try unconventional ones.

Stacy Johnson

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