Auto Loans Available, Bankers Say
The government is considering using part of the $700-billion bailout package in markets that support auto loans. Treasury Secretary Henry Paulson told the press Wednesday that lenders aren't lending and something needs to be done to change that.
But local banks and car dealers insist auto loans are still available to qualified customers.
In the auto sales industry financing is huge. About 70-percent of Lithia Motors' customers use loans to buy cars.
Though the economy continues to struggle bankers say they still have money to loan.
"They're definitely available. We have auto loans, equity loans, first mortgages, pretty much any kind of loans you'd want, business loans as well," says David Figurate, personal banker at Sterling Savings Bank.
Figurate says money to back loans isn't the problem, it's that not as many people come looking for them.
Across town, Doug O'Dell with Valley Auto Sales says smaller car lots like his are especially vulnerable to the slumping economy. Valley Auto doesn't offer in-house financing so O'Dell relies on outside banks and credit unions to lend to his customers. Although sales are down O'Dell says there are good loans to be had.
"Yeah, but they're on a graduating scale. Obviously the better credit you have the lower interest rate you have that's available to you," says O'Dell.
His lot is full of specialty cars like muscle cars and other collectibles, but with or without financing he's seeing fewer customers car shopping for fun. When his customers do buy vehicles it's often out of necessity.
"I sell a lot of utility-type vehicles. People buy these vehicles to make a living off of. I mean, they work out of them," he says.
O'Dell remains hopeful business and the economy will pick up, eventually.
"People are afraid. They don't know what's going on. I think it will come back. It's just a matter of riding it out," says O'Dell.
Figurate says to approve a loan they're looking at your credit score, income-to-debt ratio and require a 10-percent down payment on new cars.
Henry Paulson said the government prefers an approach that would accelerate support to the industry rather than offer a direct out.
