All Cash Car Deals
The few consumers who are buying new cars are being forced into bigger down payments or all-cash deals in the latest sign of how the credit crisis is battering an already weak auto market.
The average down payment on financed car purchases has jumped nearly $1,000, about 20%, since July, and all-cash transactions are at their highest point in three years. Consumers are increasingly being frozen out of the credit market, as banks and other financial institutions continue to tighten their lending practices.
The finance companies of General Motors, Ford Motor and Chrysler have recently increased the interest rates they charge their dealers. Typically more than 90% of buyers finance their vehicles. But now, some dealers have been unable to get financing even for car buyers with exemplary credit scores.
In September, sales fell below 1 million vehicles for the first time in 15 years, but analysts fear the market could be even worse in October.
