Symptoms of the country’s financial ills have found their way to Annandale car lots, but people close to the industry say it’s nothing to be sick about. According to news reports, anyone looking to buy a car will have a hard time getting a loan in this failing economy, but that isn’t really true, said Vince Lundeen of Lundeen Bros. Ford in Annandale. Ford has indicated that there is still plenty of money to go around – it might just come with a slightly higher price tag. "Some people on the bottom end of the spectrum who might have squeaked through in the past may not get financing now, or they may need more of a down payment," Lundeen said. Still easy for most "It’s still easy for the majority of our customers to get a loan." Kristen Salmela, finance manager at Country Chevrolet in Annandale, said while loans are still available, it’s almost certain that borrowers will have to invest something before they drive away with a new vehicle. People used to be able to bury old equity into a new car loan, but you can’t do that anymore, Salmela said. At the same time banks like Chase, M&I, Bank of America and Wells Fargo, which Ford traditionally does business with, have raised rates to cover their rising costs. "It’s not up a lot," Lundeen said. "Maybe a half a point or so." Salmela gets financing for Country Chev customers through five main banks and although all of them are scrutinizing their deals more closely, only one of them, GMAC, has really tightened its belt. A subprime bank, which means the company approved a lot of high-risk loans in the past, GMAC rarely looked at a customer’s credit report, Salmela said. Now they won’t give a loan to anyone with a credit rating of under 700. The other change from last year, Salmela said, is that she used to be able to send an electronic loan application from her office and get a response almost instantaneously. Now banks are taking the time to look applications over. "It’s all about the cash down," she concluded. "Banks want some sort of investment from you. "Even if a customer has perfect credit, that doesn’t exempt them." Bryan Bruns, president of Annandale State Bank, said the state of the economy has had little effect on how it does business. He blames the country’s financial woes on the government’s lack of enforcement of regulations on companies that give out high-risk loans. Never a bad loan As a community bank ASB has always been subject to more regulations, Bruns said, but more important, ASB never makes a bad loan because it has a greater investment in the deal. Its customers are friends and neighbors, not strangers living five states away. If the bank makes a bad deal and loses money, the shareholders lose money. "Some loans go bad, but we never make a bad loan," Bruns said. "If we believe it’s a bad loan we will sit down and explain why it’s a bad one and help our customer get a better one." That might mean settling for a 2005 model car rather than a 2008, he said. That seems to be the consensus, that people in the new economy are having to settle for what they can afford. "We’re not here to make every single loan possible," Bruns said. At the same time, those with less than sterling credit shouldn’t fear. While ASB definitely looks at credit ratings, it also takes into account money down, risk factor and, finally, how well it knows the customer. "To most people, their computer is their bank. But their computer isn’t going to go to church with them, it isn’t going to try to please them," Bruns said. "We have a number of people with poor credit ratings. We work with them every month to increase their scores." It’s business as usual at Star Bank in Annandale as well. Car loans are still available and not any more difficult to qualify for than ever before, said the bank’s James Peterson. "We’re still committed to serving our community," he said. The bigger problem for car dealerships isn’t the lack of financing. It’s the overall economic climate, accentuated by the dramatic rise and now fall of gasoline prices. People are ultra-conservative in their spending habits these days, Lundeen said. "What’s hurting car dealers more than losing financing is the decrease in the traffic. We just have a shortage of customers."
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