With reports of banks merging to survive and loans almost impossible to obtain, consumers are doing what they typically do when uncertain: sit on the sidelines and wait.
“We have the products, we have the loan funds, what we need now are the people,” says Jerry Cizek, president of the Chicago Auto Trade Assn., which represents more than 500 Chicagoland new-car dealers looking for customers.
The CATA has launched a new ad campaign telling consumers loans are in fact available.
“Contrary to the concept that there are no funds out there, we are trying to tell them that loans are available,” says John Phelan, a Lyons, IL, Chevrolet dealer and chairman of the CATA. “What we lack are customers.
“We can't fight the economy, but we can fight the notion there are no (loan) funds. Loans are available, but there isn't the awareness they are available.”
The CATA says for years local banks have had relations with dealers to provide financing for them and their customers. While the auto makers' captive finance companies are tightening up on loans and giving them only to their most credit-worthy customers, local banks have stepped up efforts to generate business.
“We've had local banks come to our dealers offering to make loans, because that's what banks are in business to do,” Phelan says. “There's no lack of funds by any means.”
There is no cutoff period for the CATA's radio and print ad campaign.
“We need to bolster consumer confidence, and we'll run the campaign as long as the market is in the state it's now in,” Phelan says.
And if sales remain soft when it comes time for the annual CATA-sponsored Chicago auto show next February?
“We'll keep waving the flag about the availability of financing at the auto show if we need to,” he says.
Cizek says dealers elsewhere could follow the CATA's tack.
“I'm hearing from my dealer association counterparts across the country of a growing traction for similar programs and an interest by the NADA (National Automobile Dealers Assn.) in a national program,” he says.