Subprime time
Lenders are also making more loans to buyers with subprime credit, but the level of repossessions has not increased.

In 2006 about 9 percent of new car buyers had FICO credit scores of 620 or below (usually considered subprime), up 3 percent from the previous year, according to the report.

"They want to move iron," Nerad says. "They want to sell cars. One of the ways to sell cars is to lessen your lending requirements."

Elmendorf agrees. "To have growth, you have to stretch your lending requirements," he says. But "the auto industry has avoided the subprime problems so far," he says.

Repossession rates "haven't changed for some time," says Spinella. Research shows that people will stop making house payments and credit card payments before they'd stop making the car note, he says. You can check up-to-date interest rates on new and used car loans on Bankrate's Auto homepage.

"Car payments were the last to go," Spinella says.

Prices up or down?
The bankers study also found that buyers were spending about $200 less. In 2005 the average purchase price was $23,500. In 2006, (the latest numbers used for this June 2007 study), it was $23,300.

But other industry measures show transaction prices on cars increasing slightly. For 2006 the average buyer paid $26,740 for a vehicle, according to statistics from J.D. Power. In 2007 the price climbs to $27,393.

At the same time, it's "a favorable environment for consumers because of the intense competition," says Libby.

Leasing, which is especially popular with consumers who want to drive more car than they might be able to buy, is either stabilizing or dropping, according to recent data.

The actual number of leases is down, according to the bankers study.

"Leasing, in recent years, has been marked by subsidies by the manufacturers," says Elmendorf. Those subsidies meant that buyers drive more car for the money.

These days, "fewer banks are promoting leasing and the manufacturers are not stressing leasing with their subsidies," he says. The study shows a 21 percent drop from last year, as reported by lenders. But Elmendorf cautions the sample study on leasing is about half the size of that for the rest of the survey. Another industry measure predicts that leasing is fairly level.

Statistics from J.D. Power show that 20 percent of buyers in 2006 chose to lease. In 2007 that figure was up to almost 21 percent. "We show leasing relatively stable around 20 percent," says Libby.

When it comes to buying a car, consumers have a lot of power -- if they elect to use it. "They need to shop for financing as well as they shop for the vehicle itself," he says. About 54 percent of buyers finance through the dealer, while 25 percent pay cash or use a loan from a bank, credit union or other source, according to statistics from J.D. Power. The remaining 21 percent lease.

"Overall there's a lot of debt," says Elmendorf. "And if you add that to credit card debt, and home equity debt, consumers are pretty tightly leveraged these days."

Dana Dratch is a freelance writer based in Atlanta.