Tight credit, which has hamstrung real estate and financial firms, has put a dent in auto sales and hurt auto dealerships in parts of the country, but local dealers say they're in relatively good shape.

Tight credit, which has hamstrung real estate and financial firms, has put a dent in auto sales and hurt auto dealerships in parts of the country, but local dealers say they're in relatively good shape.

The National Automobile Dealers Association reported 61 dealers shuttered their stores or limited operations to used cars during September. Weakened by gas prices that crippled sports utility and truck sales over the past 18 months, some dealers crumbled under the weight of a sagging economy. Nationally, new vehicle unit sales may fall more than 20 percent this year, according to the association.

"Knock on wood, it hasn't been as critical here yet, but we have seen a couple of lenders tighten up a little," says Butler Auto Group Vice President Warren Cooper.

Ford Motor Credit is actively lending to low-risk borrowers, Cooper says. "Locally, we have a good mix of lenders with Rogue Federal Credit, Northwest Community Credit Union and Southern Oregon Federal Credit Union."

On the downside, he says, General Motors' lending unit GMAC announced new guidelines last week, reducing its lending by 40 percent. GMAC now requires a credit score of 700 or better for a car loan.

Alan DeBoer, who has ownership stakes in Town & Country Chevrolet in Ashland and Airport Chevrolet, says the same no-down-payment financing approach that created issues in the housing industry carried over into the auto market.

"Lenders started financing whatever on a car, they dipped down pretty deep," DeBoer says. "Buyers needed no proof of income and could get 100 percent loans. They can't do that now, nor should they ever have."

The tighter lending practices has limited dealerships' pool of customers.

"We've had a harder time selling cars because people can't get the open checkbook financing they could six months ago," DeBoer says.

Cooper anticipates more activity as financial institutions get more comfortable and loosen lending requirements.

"I'm hoping credit markets and the bailout (of financial firms) will benefit the automobile dealers as well as the mortgage business," Cooper says. "It just hasn't hit the auto industry as hard yet; not to say it won't."

There is a combination of things causing people to wait on the sidelines, Cooper says. "Mostly it's the fear factor with the stock market, the economy and the election. It's going to take time to sort things out."

DeBoer says buyers running into credit roadblocks have alternatives.

Chevrolet, for example, offers a subvention program in which the manufacturer buys down interest rates not only for new cars, but its certified used cars as well.

"If buyers are paying their bills," DeBoer says, "they won't run into problems."

Auto dealers have their own financing issues as well, paying for the cost of inventory. Jackson County's auto dealers appear to be holding their own.

"I think we've all paid off debt as we went," says Dave Mills, among the owners at Airport Chevrolet, Dollar GMC and Southern Oregon Subaru. "We're actually in an acquisition mode. We've paid for everything; now that times are tougher, maybe there is the possibility that someone might sell and we're in the position to buy."

As gas prices have inched down, Mills says there has been renewed interest in sports utility vehicles.

"Four months ago, we watched imports go completely out of sight. Now people are back to buying SUVs. They need the room, they want the comfort and they want the safety. They say it's worth the safety of my family to give up 10 miles per gallon."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.