No one has ever seen such turmoil in the auto industry, and this chaos affects both buyers and sellers.
Potential buyers are worried about their own finances and confused about whether they can qualify for credit. Even if they do get credit, they wonder what the rate might be.
Manufacturers -- particularly Chrysler, Ford and General Motors -- are anxious about staying in business long enough to weather this perfect financial storm.
Although this situation has been with us for months, it's not likely to go away in 2009 and maybe not even into 2010.
So it's important for consumers to plan ahead when it comes to transportation needs.
To help you deal with the coming year, here are nine things to consider in 2009:
1. Don't be so quick to dump the vehicle you have now. Yes, we are a consumer-oriented society. If the auto industry is going to bounce back, we're all going to have to start buying at some point.
But for now, look at your current vehicle as something you may need to live with for another couple of years. If it needs some repairs to make it more reliable, find a way to get that done.
Spending $1,000 now will be infinitely cheaper than taking on five years or more of new car payments in an uncertain economy.
2. Boost your credit score as high as possible. Lenders are getting a lot pickier about who they will finance, and anyone with a credit score under 700 could find it tough going. So check your score and avoid the sorts of things that can drive down rating, including applying for new credit or even initiating credit inquiries.
3. Avoid repossession or voluntary give-back of your vehicle. There will be more auto repossessions in the coming year than perhaps ever before. Many will be unavoidable, but some will be from people who just choose to stop making payments because they don't want to cut corners elsewhere in their budgets.
A car loan, next to a mortgage payment, is the single biggest determiner of your creditworthiness. A repossession or a give-back will haunt you for at least five years. If you're in trouble, check with the lender on whether new terms can be worked out.
4. Cash or trade-in equity will be king. While you will see some zero-down financing options, they won't be offered to anyone but shoppers with top-tier credit.
Even if you do qualify, don't take the deal. All cars -- including the best models -- lose value from the moment you buy. That's why you're probably still upside-down three years into your zero-down car loan.
Try to put down at least 10 percent, with 20 percent a better target.