Chicago-area auto dealers, already hurting from consumers' spending slowdown, are now also dealing with a credit crunch that's hitting the few buyers left in the market.
Since the lending market continues to be spooked by bad loans and financial failures, it's more difficult for some consumers to get credit -- and they've got a shrinking number of lenders from which to shop for an auto loan. Wachovia Corp.'s banking arm was the latest to disappear after the federal government sold it to Citgroup on Monday.
One local dealer says the result is a 10% drop in business.
"They are being very selective," Monty Scher, president of Rogers Auto Group in Chicago, said of lenders. "A couple of months ago, a 680 to 700 credit score wouldn't have had a problem." Now that same buyer has to jump through more hoops to get a loan, and usually at a higher rate than in the past.