Below The Beltway

Evidence that the tight credit markets are having an impact on Main Street:

The clotting of credit hasn’t been uniform across the economy from one industry to another, or even among different auto companies and the different makes and models they’re trying to sell. It’s still quite possible to get a car loan, even with less-than-perfect credit. But the most favorable terms are likely to be associated with the less desirable vehicles. Dealerships are still offering interest-free financing, for example, on certain sport-utility vehicles that haven’t budged from car lots since gasoline prices spiked. Leases, meanwhile, have become costlier; in August, Chrysler stopped writing them for new cars.

The availability and terms of a given loan, whether for a house, a car or a credit card, depend on the customer’s credit rating. Two years ago, a person with a credit score of 580, on a scale of 350 to 850, could qualify for a conventional 30-year fixed-rate mortgage at 6 percent interest, according to John Ulzheimer, president of consumer education for Credit.com. About 83 percent of consumers with credit scores have a 580 or better, he said.

Now, he said, a person may need a 780, a standard met by only 17 percent of people with credit scores.

(…)

Sales of new cars, trucks and minivans in the United States dropped 27 percent in September from the same month a year earlier. Nissan saw a 36.8 percent drop; Ford, 34.5 percent; and Toyota, 32.3 percent. Auto sales have eroded for 11 consecutive months. And Tammy Darvish, vice president of Darcars Automotive Group, said customers are holding on to their money in part because of what they’re seeing in the newspaper and on television.

“It’s scaring the heck out of people. We’re spooking people,” she said. “I think an infusion of confidence can solve a lot of our worries and our problems right now.”

The question, though, is where that confidence will come from at this point.

Whatever the answer might be, though, don’t count on it coming from government:

Robert B. Zoellick, president of the World Bank, said the global financial system may have reached a “tipping point” — the moment when a crisis cascades into a full-blown meltdown and becomes extremely difficult for governments to contain.

The mushrooming problems “will trigger business failures and possibly banking emergencies. Some countries will slip toward balance-of-payment crises,” he said yesterday, speaking at the Peterson Institute for International Economics.

The crisis threatens to reverse years of prosperity that financed the economic growth in developed and emerging countries through a global financial system that made credit widely available. Banks and governments were able to borrow money on an unprecedented scale by selling debt in new kinds of packages, allowing even the least creditworthy consumers to borrow and spend.

This ain’t over yet, folks.