Buy the Car NOW This Year, Don't Wait!

Yes, yes, I know. I sound just like every other overbearing, pushy used car guy you've come across. I also know that my stated purpose for this blog is to educate and entertain as opposed to sell, sell, sell!

Trust me (you love it when a used car salesman says that, I know you do) I'm only trying to help. Being a student of my chosen industry I read virtually every trade publication I can get my hands on and for the past eight weeks articles concerning the big banks have become more and more common. These articles are not about rousing profits and great first quarters either.

It seems that the "credit crisis" has finally started to hit the automotive world. Each week it seems another bank is busy raising lending standards. I'm not talking about your local small town operations either, I'm talking about the heavy hitters, like AmeriCredit for instance. They raised their minimum acceptable credit score by ten points last month. GMAC, General Motors' old captive finance arm tightened their standards no less than three times in 2007 and will likely do so again this year.

What does this mean for you? Simply put, until we start to see some economic relief (of which there is none currently on the horizon) it will become more and more difficult for you to obtain financing for your next car purchase. Even those of you with great credit need to be very aware of your debt load right now. Debt-to-income ratios are coming under more scrutiny than I've ever seen in the past. Not so long ago if your credit score was over 720 I could easily obtain financing for your car purchase regardless of existing outstanding debt. Today the first question often asked by bank representatives is in regards to your debt load. Are you still able to be financed if you've paid your bills on time? Generally yes, but perhaps not at the rate you might feel you deserve.

Do you have credit that is less than perfect? Now is most assuredly the time to be shopping for your car if you have already planned to purchase one this year. Odds are it will only become more difficult as the months roll on for you to obtain automobile financing if your credit has blemishes. You will either have to come up with a significant down payment to show a true commitment on your part or you will be told that a co-signer will be the only way to obtain financing. Some of you may be finding this out now.

I believe we have some ways to go yet before hitting "bottom" in terms of more stringent approval guidelines. If a new or used car purchase is on your to-do list for 2008 you will only be potentially costing yourself money by holding off on your purchase. Now is the time to buy your car. Will things get better? Most assuredly. The question is when and I do not see a relaxing of credit standards until at least 2009, if not beyond.

Hopefully I've proven myself to have better motives than just pushing you into a car today. You will only be helping yourself by moving up your car buying agenda. (Well, yes I suppose it won't hurt me either, but this is a true win-win situation!) Thanks for reading and please stop by again!