Great time to buy a car - if you can get a loan

Katie Cummings peruses the features of a Chevrolet Tahoe at a dealership in Grinnell, Iowa. Experts say it is a car buyer's market and some dealers are seeing more customers.

DES MOINES - 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.

Approvals at the dealership have dropped down to about 50 percent, a fall from about 80 percent just a year ago, he said. People with credit scores below 650 are having trouble getting approved, he added.

In cash terms, a credit score of 720 to 850 could get you a car loan at about 6.7 percent, which means payments of $768 a month on a 3-year $25,000 loan, according to Myfico.com, a Web site operated by Fair Isaac Inc., a Minneapolis provider of credit scoring. A score of 620-659 means payments about $63 higher, at $831 a month.

The financing arm of Gener-al 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 to the 700 minimum score put in place two months ago.

Federal bailout money and credit unions partnering with GM and Chrysler LLC are helping keep loan rates more affordable.

If someone obtains credit, though, experts say it is a car buyer's market and some dealers say it has produced more customers.

Dustin and Katie Cummings, both 25, of Grinnell, Iowa, found themselves this week at Karl Chevrolet in Ankeny, a pristine dealership on the north edge of Des Moines with acres of new cars, trucks, and sport utility vehicles.

Ms. Cummings said she's had her eye on a Chevrolet Tahoe, a large four-wheel drive SUV, to replace their smaller Mercury Mariner. They took advantage of the $1,000 cash back GM is offering. In addition they'll get another $3,000 in brand loyalty cash because Mr. Cummings owns a Chevrolet Silverado pickup.

The sticker price on the white Tahoe loaded with extras was $59,625, although they were negotiating on the final price.

Poor sales figures last year has many automakers offering big discounts and rebates. Cash back on a purchase can range as high as $8,500 on a 2008 Cadillac XLR, for example.

With much inventory to move in car lots, incentives are likely to last at least through February and maybe March.