Charlie Neibergall / The Associated Press

More Photos (1):

Other articles by David Pitt:

Lawsuit doesn't stick to Teflon For value investors, it's a good time to shop Teachers, non-profits could see changes in their retirement plans Some companies trimming, halting their 401(k) matches Here's how retirement accounts are hurting Survey: Many plan to delay retirement — voluntarily Autopsy reports indicate Iowa City family members were beaten to death Iowa, N.H. political ads face the Santa factor Struggling towns fuel hopes for future via ethanol U.S. to plant most corn since 1944 but costs will stay high, report says

Sales and Marketing
Everready Glass
Sales Reps Construction
West-Press
Printing Administrative & Professional
Tucson Urban League
CEO/President Finance and Accounting
Charles E. Gillman Company
Accounting Specialist Trades/Construction
RANCHO RESORT
MAINTANANCE POSITION Health Care
Dependable Health Services
Physical Therapists Administrative & Professional
Jorgensen Brooks Group
Counselor

DES MOINES, Iowa — By all accounts it's a great time to buy a new car. Manufacturers are willing to slash thousands off sticker prices and offer interest-free money.

But there's a catch. Those deals won't do you any good if you can't qualify. The reality is that many auto lenders are still stingy with money, so some dealers still have quiet showrooms.

"The biggest challenge we've got is the availability of credit," said Dale Early, owner of Deerbrook Forest Chrysler-Jeep in Kingwood, Texas.

Early said approvals have dropped down to about 50 percent, a fall from about 80 percent just a year ago.

"If you have (a credit score of) 700 and above, you don't have a problem getting a loan. We're seeing some great opportunities for people with excellent credit," he said. But in his experience anyone with a credit score of 650 or lower is having trouble getting approval.

In cash terms, a credit score of 720 to 850 could get you a car loan at about 6.7 percent, which means you'd pay approximately $768 a month on a three-year $25,000 loan, according to Myfico.com, a Web site operated by Fair Isaac Inc., a Minneapolis-based provider of credit scoring.

By comparison, a score of 620-659 qualifies you for a loan at 12 percent, which increases your payments on the same loan by $63, to $831.

The median credit score in the United States is just barely in that top financing bracket at 723.

The reason lenders remain cautious was revealed Wednesday in the American Bankers Association quarterly credit report.

Auto loan delinquencies reached record levels in the third quarter of 2008 as unemployment continued to climb. Delinquencies for indirect auto loans — those made through an auto dealer and which account of 90 percent of auto loans — rose to a record 3.25 percent. That's up from 3.07 percent in the second quarter.

But the outlook may be improving as the restrictions on credit may be easing.

The financing arm of General Motors Corp., GMAC Financial Services, has expanded its lending by including customers with a credit score of 621 or above, a significant expansion of credit compared with the 700 minimum score put in place two months ago.

Those tougher credit score requirements meant higher scores were needed for buyers to get the best rates, but they locked some people out of getting loans completely.

Last month, the Treasury Department said that it would give $5 billion in federal aid to GMAC, prompting the company to announce a week ago, its relaxed lending requirements. With the cash, GM also launched a new round of zero-percent financing offers.

"I think that some of the bailout money initially given to lenders is finally starting to trickle down to the streets," said Lenny Sims, general manager at NADAquides.com, a company that focuses on auto pricing.

Another loosening of the purse strings occurred on Wednesday when a group of credit unions that partnered with General Motors and Chrysler to offer rebates and make low-cost loans to car buyers in 12 states said they would expand the program nationwide.

David Adams, president and chief executive of the Michigan Credit Union League and the national credit union group CUcorp, said the expansion of the "Invest in America" program is expected to give 90 million credit union members potential access to low-interest loans for GM and Chrysler vehicles.