Tuesday, December 18, 2007

CRANSTON, R.I. -- The mortgage crisis is starting to affect the auto industry.

NBC 10's Audrey Laganas reported that the national credit crunch could make buying a car and getting financing a little more challenging.

At Tasca Lincoln-Mercury, the national credit crunch means many customers are more interested in Mercurys than Lincolns.

"They select vehicles that might be a bit smaller, a little more economical, to ultimately fit the car to their budget," Bob Tasca III said.

Lehman Brothers' predicted a continued "spill over" of the mortgage crisis onto auto credit.

A recent survey pointed to the tightening of two key sources of credit for car purchases: bank lending and home equity credit.

"What we're seeing is less money down," Tasca said.

"And we noticed that recently, over the past few months, they've tightened a little bit," AAA Southern New England's Chief Financial Officer Stephen Manty said

Manty said lenders are taking a closer look at credit histories.

If you're having trouble with an existing loans, refinancing to a lower interest rate may be an option.

"Many people don't realize you can refinance your car loan to reduce your payment, but what they have to be careful of is not to extend their term beyond, say, the economic value of the particular vehicle," Manty said.

f you do find yourself in trouble with a car loan, it's most important to communicate with your lender. In some cases, depending upon the circumstances, they may be willing to work with you.

Source: http://www.turnto10.com/northeast/