Who's your lender now?

So where are the captive finance companies now that automakers really, really need to move some iron?

Sold off or too hurt to help much, many of them.

Here we are in a classic U.S. auto downturn, with sales down 10.5 percent so far this year. Let's review. The general economy stinks, fuel prices are way too high, and people are worried about their jobs and just not buying. Yep, a downturn.

This is the point in the business cycle when automakers turn to their captive finance arms and shout: “Help! We’re dying out here. Slash your rates and lend, lend, lend!”

Only this time, the answer is: “Nope. Losing too much, so we’re cutting back.”

For example, General Motors raised some cash by selling a majority stake in General Motors Acceptance Corp., but that means GM no longer can simply tell it to loosen the purse strings. GMAC has to consider what’s good for itself.

Two problems are blocking automakers from making it easier to buy a car.

First, with the $4-a-gallon gasoline spike, used truck prices cratered. So lenders that set residual prices too high two or three years ago (um, everybody) are getting hammered when they repurchase trucks at the end of leases. Automakers selling gas guzzlers -- I'm looking at you GM, Toyota, Ford, Chrysler and Nissan -- are taking charges or setting aside bigger reserves at their captive finance arms.

Worse, there are fewer auto lenders. Chrysler Financial and Chase got out of the leasing business. Most automakers’ in-house banks are cutting back on leasing and getting pickier about who they lend money to. That’s also true among private lenders. Some are exiting auto lending entirely. This week, HSBC said its $12.5 billion auto loan portfolio was below critical mass and didn’t give it pricing power, so it would do something else.

So when dealers finally land would-be buyers, they have to work harder to find a lender. It’s crunch time and, too often, those captive lenders are part of the problem, not part of the solution.

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