Can I get financing?

It's no secret that credit is tighter than in previous years. As reported in the Washington Post, a study by Accenture, a global management consulting company, shows that 64 percent of respondents had credit problems when buying a car. For 34 percent, it meant not getting a car, while for 30 percent it meant getting a different car than they had intended to buy.

GMAC, which has traditionally been one of the primary lenders for GM car sales and is now providing financing for Chrysler, Dodge, and Jeep dealers, is one of the lenders that have pulled back on auto loans. With help from the federal government's TARP funds, however, it has loosened its restrictions in recent months.

The National Automobile Dealers Association says, "As long as you have a steady job and a good credit score, you have an excellent chance of securing financing." It notes, "There are many regional banks, credit unions, and other financial institutions that did not get caught up in the mortgage meltdown, and therefore, have plenty of money to lend." Keep in mind, though, that many lenders now require down payments of about 20 percent.

We recommend that you research your financing options before you go to the dealership to buy a car. Compare the loan rates and terms from various banks and credit unions with what's available through the dealerships. And use the auto-buying calculators on ConsumerReports.org to determine the vehicle price range that you will be able to afford.

To boost your credit rating, reduce debt, avoid late payments, and fix errors in your credit reports. You can get a free credit report by going to www.annualcreditreport.com, although you'll have to pay a fee to get your credit score from the three major credit reporting agencies, Equifax, Experian, and TransUnion.

For more advice on auto financing, read Five Keys to the Best Loan Rate.