Sep 30, 2008 10:28 pm US/Pacific
Asking Questions: Can I Still Get A Car Loan?
SACRAMENTO (CBS13) ―
Getting a loan for most of us is more difficult now compared to just a few weeks ago. Car dealerships say it could be tough to get a car loan unless you have the right credit.
Is there a magic credit score number? One local dealership says they expect a score of at least 690.
"There are some banks that won't take a 650 score," said Katina Rapton, who runs Mel Rapton Honda on Fulton Avenue.
She's seen a bumpy road before, but now banks are hitting the brakes on any loan with any real risk. The key to getting a loan, Katina says, is credit and the debt-to-income ratio.
"The bank is not going to take what little money they have to lend and make a bad loan out of it," she said.
The more debt you have, the more unlikely Katina and company will be able to sell you a car. It's tough for customers who can't get the car, but it's especially tough for these dealerships, which are struggling to get people on the lot in the first place.
"It's not easy," Katina said. "I'm not going to sit here and tell you we're not struggling."
Mel Rapton Honda has cut four of its 170 employees, and is relying on cash from the car service center. It can be difficult to get the gas-guzzling SUV's off the lot, and when the dealer sells for vehicles for less than invoice, Honda eats the loss, paying the dealer for the difference.
"We're not making much money, if at all, on new cars," Katina said.
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