One of the main things hurting auto sales, dealers say, is the impression that because of the financial crisis, you can't get loans to buy cars.
"People are under the false impression that they can't get loans," said Dick Campagni, owner of Carson City Toyota and Capital Ford. "I've got Ford Motor Credit, Toyota Financial, we got the banks, we got the credit unions, we've got institutions approving loans every day. But if you listen to the news media, you would believe that nobody could get a car."
Patty Lewis, vice president for lending at Greater Nevada Credit Union, said they are actively making car loans. In fact, what worries her is not the lack of money to loan, but the lack of borrowers.
"I think for us, financing is not a problem," Lewis said. "We are actively trying to make loans."
Lewis cites a fear factor among consumers, that people are worried about losing their jobs and other economic pressures.
"We are seeing a step up in terms of used vehicle purchases," Lewis said. "So people are being conservative."
Lewis said that even though it's the leading auto lender in Northern Nevada, GNCU has tightened lending standards.
"Credit can be an issue if people are late on their payments or having difficulty with their mortgage," she said. "If someone is a really good credit risk, we can step out and take more risk."
There also is the issue of the options car dealers can offer for financing.
"It's still not what it once was," said Matthew Hohl, general manager of Michael Hohl Honda Subaru. "We could use more banks. We lost a lot of banks in the last year for auto-specific loans. But the financing that is available is really competitive."
Hohl also said that banks want more security in exchange for loans than in the past.
"Banks are certainly more interested in a down payment than they were a year ago," Hohl said. "We can still do zero down, but you better have good credit."
Campagni said that the prime sources of financing still are there to make auto loans.
"Financing has been steady all along with the major companies," Campagni said. "Some of the banks got in trouble, but I'm sure most of them were doing bad loans. If you don't run your business properly, you are going to have a problem. If you do run your business properly, you are going to be successful.
"There are lots of banks out there that weren't affected."
One of those is Colonial Bank, according to Jan McCauley, vice president and manager of the Carson City branch.
"We positioned ourselves on the conservative side so we wouldn't have these problems," McCauley said. In fact, McCauley said they are doing so well, they are opening a new branch in Gardnerville.
McCauley said that much of the problem was that lending practices became too lax, and people were given loans regardless of their ability to pay them back.
"Colonial Bank is very conservative, so we didn't get to play in that game," McCauley said. "We didn't loosen our criteria before, so you did have to put 20 percent down and qualify."
In McCauley's 31 years of banking, she's seen this type of problem emerge seven different times. Now, she said, the industry is going back to sound lending practices.
"All the banks in town have money to lend, and are making loans," McCauley said. "If you can make the monthly payments, there is money to be had."
- Contact Kirk Caraway at kcaraway@nevadaappeal.com or 881-1261.