The car business continues its downward spiral. New figures for March show that GM and Chrysler are down 20% and Ford is down 14%, year over year. Ready for the stunner? After defying slowdown, Toyota now is down 10%. Honda is the only of the Big 5 automakers that emerged flat but unscathed. Be on the lookout for deals!

One word about Chrylser, but Clark wants to preface this by saying he's hasn't heard or read anything to substantiate his beliefs, nor is he trying to kill business at Chrysler dealerships. He's just concerned because the company was recently taken private and is being run by non-automotive people. So should the company go belly-up, he fears the owners might just shrug their shoulders and move on to managing other assets in their handsomely diversified portfolio. Chrysler dealers might want to get assurances from corporate that warranties will be honored even if the company goes bust. Again, Clark has no inside knowledge about whether Chrysler is ailing or not. He's just thinking ahead about possible future scenarios.

Finally, if you like fancy cars, this is a good time. Porsche sales are down 26% and Lexus is down around 20%. The theory that the rich would continue buying status automobiles through the lean times has proven false. And keep in mind that cash is king at the dealerships as loans become harder to get.

There's great news for your wallet coming to a car lot near you. Automakers have been trying hard to scale back production to get supply and demand in sync. But it's not working; demand is dropping quicker than they can cut back production. There's simply too much product out there. Couple that with the fact that repossessions are skyrocketing and the housing slump is cutting into people's car budgets -- it all adds up to a perfect storm for the savvy car shopper. The Wall Street Journal reports that domestic, Japanese and European automakers are all offering great deals such as 0% or 1% financing and big rebates.

Edmunds.com will keep you up to date with the latest incentives. Keep in mind that sometimes a credit union car loan at 5% with loads of cash back from the manufacturer is a smarter move than an offer of 0% financing from the dealership with no cash back. So arrange your financing in advance, know the market and avoid "the grind" at the dealership. Start pricing vehicles at CarsDirect.com. They'll give you a fixed price that you can use as a reference point. You may even find that their price is the best. Surprisingly, people love the Internet for researching cars, but they always go to the dealership and face "the grind" when they want to seal the deal. Old habits die hard.

Over the holiday break, Clark's executive producer Christa was in a car wreck. While she's fine, her SUV was injured. This is the same vehicle that she bought used and paid for in full about 4 years ago. While the SUV was being repaired, her insurance company gave her a minivan to run around in. Christa is one woman who normally wouldn't be caught dead in a minivan. But after driving it for 3 weeks, she fell in love with the roominess and safety features it offered for parents with young children. She phoned Clark in Las Vegas and asked him if he thought it was a good idea to buy a minivan. Clark didn't think so, nor did Christa's husband Mike. Then she saw an article in the paper about how buying 2007 minivans is a smart move right now. That's partly because this is the last year manufacturers will make surplus vehicles; going forward they'll be making them only when orders come in. When Christa looked at the byline on the article, it said Clark Howard! Turns out Clark wrote this article several weeks before the holiday season and didn't remember his own advice. So mama went ahead and got herself a Honda Odyssey minivan. She went through the Sam's Club buying service and loved the no-haggle process. She also got credit union financing that was just under 5 percent, and then the dealership was able to match the rate and offer additional incentives. But now she has a 60-month loan, which definitely pains Clark to hear!

Auto loan delinquencies are skyrocketing; they're reportedly the highest they've been since 1991. That's a sure sign of economic slowdown. Whenever people have been squeezed in the past they'd do a home equity line of credit. But now those equity lines are tapped. That's why it's very important to stay current on your car loan. The interest rates are generally good, but the penalties for default can be huge. And let's not even speak of repo. Having your car repossessed is doubly harmful. Not only do you have to find other ways to get to work, but most states have what's known as "deficiency." This is what happens when the lender sells the repo car at auction and gets below wholesale value. They're then legally allowed to bill you for the deficient amount. If you can't pay it, they can sue you and get a judgment against you. So if you're having trouble making your car payments, get in touch with your lender and try to arrange a forbearance to avoid repo. Under the terms of forbearance, the payments you can't make now will likely be tacked on to the end of the loan. One final word about prioritizing your debts: If you're really pinched, don't pay that credit card! Pay your mortgage, food and medical expenses and your car loan first. Put the credit card collectors on ignore until you're able to begin paying them again.

Consumer Reports has released its annual vehicle reliability survey and Toyota has come out with a black eye. For the first time ever, the Japanese company's Camry has been dropped from the recommended list. Toyota made a corporate decision a few years back to become the world's largest automaker. In doing so, they had to take the focus away from making quality vehicles and shift it to growth. That explains why Toyota as a whole now checks in at No. 5 on Consumer Reports' tally of the most reliable vehicles sold in the United States. Ford has emerged as an unlikely hero in the report thanks to its enormous jump in quality. The "Not your Father's Ford" tagline is taking on a new meaning and people can no longer joke that Ford stands for "fix or repair daily." The top carmaker remains Honda, followed by Acura and Scion. The first American nameplate on the list is Buick, followed by Mercury and then Ford. The least reliable car sold in the United States is Land Rover, followed by Hummer, Cadillac and Mercedes.

Cars speak to us emotionally. Clark's producer Joel bought a 2000 Nissan Altima recently that doesn't really stir his emotions; he simply views it as dependable transportation. Joel might have picked a Honda Element if he were buying on emotion alone. Christa, Clark's executive producer, has named the hybrid version of her standard Lexus RX 300 as her dream car. Sometimes it's hard to step back from the emotional side and make a smart auto purchase. But think about the underlying hassle that comes with purchasing an unreliable vehicle. When you're ready to go car shopping, get pre-qualified for a car loan from a credit union and then get Consumer Reports' annual auto buying guide. Try to find a balance of quality and that emotional X factor and you'll be on your way to a great car purchase.

The car market is going through some tough times right now. Sales are the worst they've been since the financial crisis of 1998. Toyota has reported lower sales for three months in a row, especially with their trucks. Ford's sales are down 20 percent over the last month and 14 percent over the whole year. GM is probably doing the best, which in this case means their sales are just on par with last year's figures. Meanwhile, dealers are scrambling because they're overloaded with '07s on their lots and the '08s are already in place. Add all of these factors up and it's clear that consumers are in charge of the car market.

People often ask Clark for a recap of what they should know when buying a new car. First off, get your financing in place before you buy. You'll usually get the lowest rates from a credit union or an online bank. Keep this rule of thumb in mind: If you can't afford a car on a standard 48-month installment plan, you're overbuying. Once you have your financing in place, check out Consumer Reports for recommendations about quality vehicles. Then check prices in the marketplace. Look at CarsDirect.com where you'll get a guaranteed price on a car. You should also test drive the car you want before buying. Visit a car rental business and see if you can rent one for cheap over the weekend. That way you'll have two days to decide if you like driving the car, not just 10 minutes. If you have to interact with a car dealer, try doing it by e-mail to avoid high-pressure sales pitches. And make sure the Internet price you get includes all junk fees like documentation charges.

Over the past five or six years, there's just been one deal after another when it comes to buying an automobile. It goes back to the months after 9/11 when GM tried to jumpstart sales with offers of zero financing for five years. Other automakers quickly followed with similar deals. But now people aren't buying cars as readily because of the fallout from the stock and real estate markets. Overall the industry is having dismal sales results. So that means that you have so much bargaining power right now that it's not even funny. Yet two-thirds of consumers squander that power by not doing the right things.

What should you be mindful of when you go to buy a car? First, do research online before you buy. Check Consumer Reports and sites like KelleyBlueBook.com and Edmunds.com to find out about reliable cars that won't need much maintenance. Second, arrange for financing in advance before you get to the dealership. Credit unions offer interest rates on car loans that can be one to three percent lower than other lenders. You may also want to check online lenders. Even your auto insurer may be able to give you a competitive interest rate. Whatever you do, don't go with a traditional bank or dealer financing. Also, don't tell the dealer you're a cash buyer or credit union customer because they'll factor that into the price in a negative way. Finally, buy your car before you get to the dealership. By this Clark means you should avoid going to the dealer and negotiating the purchase of your car or you'll face "the grind." The grind is when the salesperson says he or she will go talk to their manager about getting you the best deal. Instead they go watch TV for five minutes and come back and tell you that the manager couldn't help out with a good rate despite their best efforts on your behalf. This is total baloney. When it comes to price, you want to stay in your ballpark, not theirs. After all, they have home field advantage because they sell cars everyday while you may only buy a handful of times over the years. As a final thought, you may also want to purchase through a warehouse club if you're a member. There you'll enjoy a set price and no haggling.

Clark recently spoke on the show about how what happens on Wall Street affects what happens on Main Street in America. One way you may feel a pinch is in the credit card field. Dow Jones recently reported that credit card companies are starting to tighten their standards. This will happen in a number of ways: Credit limit increases won't be so common; potential customers who may have previously qualified for a card may no longer qualify; and you'll probably be seeing less balance transfer offers.

Credit card companies have historically borrowed money short-term at very low interest rates. Then they turned around to lend that money to you via your credit card at an average interest rate of about 16 percent. But now their ability to borrow at ultra cheap rates -- what's known as commercial paper -- is being squeezed. Since they don't have such easy access to money anymore they can't offer their deals to you. The credit card companies are also worried about people's ability to pay their debts. A Dow Jones survey found that a number of banks are tightening their standards one by one. This is not being done across the board, it's more of an industry trend -- so you still may see some low-interest transfer offers in your mail. The car loan field will also be clamping down too. You may be expected to have higher credit score, pay a higher interest rate or come in with a down payment on your vehicle if you want to qualify. All of these trends are signs that the pendulum is swinging back in the business world. For years we've had very low terms for borrowers. Now things are changing and some us are going to get pinched in the process.

When you use a car dealer to finance your auto loan, the dealer will mark it up as much as they can. But the average black customer buying a new car pays an interest rate that's 40 percent higher than the average white customer -- even after accounting for differences in credit scores. Hispanics, meanwhile, pay almost the same as non-Hispanic whites, just slightly higher. In the used-car market, one in three blacks pay an interest rate that is above 15 percent, while the average rate for a white person is less than 10 percent. Clark thinks it's a shame that this residual racism is still around in 2007.

If you dig deeper into this story, you'll really find that anyone who doesn't get pre-qualified for a car loan will pay more than they should. So Clark advises anybody seeking an auto loan to get pre-qualified at a credit union, which will offer lower rates than a bank. Think about it like this: You may have spent hours researching your car thoroughly, but you've got to do the same on the loan. Dealers are entitled to make money on a loan if you don't do homework and get pre-qualified elsewhere. Historically, that mark-up had been about 10 percent points. After all the legal settlements of the past few years, however, it now is usually three percent. That means if a bank offers you a car loan for 5 percent, the dealer will offer the same loan for 8 percent. So whether you're black or not, it pays to get pre-qualified for an auto loan.

Clark had to replace two car batteries recently and it made him start to wonder if something was wrong with the battery industry. It turns out that it’s not the battery at all, according to the Dow Jones news wires. It’s the driver’s fault for plugging all kinds of devices into the car’s charger plugs. Clark bought a device called an “inverter,” which plugs into his cigarette lighter. It cost him $12 and allows him to plug just about any kind of gizmo into it. But it has ended up costing him much more than $12, now that two of his batteries have died. Portable GPS units are the main culprits, according to the report. And there are soon to be millions more of the devices on the market. That’s because GPS units will probably be $100 or less by Thanksgiving time. So, try to use chargers in your home if possible.

New statistics show that for the first time in almost 6 years, people are buying more cars than light trucks, which include SUVs, minivans, pick-up trucks and vans. That’s been the sweet spot in the car market for years, but now that’s shifted: Small cars are selling like mad, and big vehicles are not doing well at all. Cars.com does a list of the top ten cash back offers on the market, and Clark discovered that the discounts top 25% on several models. Number one is the Chevy Silverado, which is giving $4500 cash back (a 28.41% discount from the MSRP.) The Dodge Ram is giving a 28% discount ($6000 back) , the GMC Sierra a 27% discount, the Ford Freestar a 25% discount ($5000), and the list goes on. For those of you who want or need a large vehicle, there are some outrageously good deals out there for you. But the greatest deals are on the used ones - you can steal a deal right now. The flip side is that if you are buying a new SUV (or anything that’s not “in”), you’ll save a lot on your purchase, but you’ll get pinched on the trade-in value on your old one. If the vehicle you are trading in has enough years on it, however, the pinch you’ll suffer is not nearly as much in dollars as the benefit you get in dollars on the new one.

The average car loan in the United States has grown to 70 months in length. A year ago, the average length was 62 months, which was bad enough. But it’s gotten even worse. Payments on these loans don’t decline that much over time, but interest payments skyrocket. In addition, if you don’t keep the car that long you’re losing even more money. Cars are much more reliable these days so you can keep them for a long time. Yet, people are keeping cars just as long as they did a generation ago. Back then, people financed a car for the same amount of time they planned to keep it. If they took out a three-year loan, they kept it three years. Today, people take out much longer loans and they keep the car just a few years. So, they end up thousands of dollars upside down on the loan. Almost one in three car buyers are upside down in their car loans. The average car purchase last year was more than $29,000 and that is frankly more than most people can afford. You don’t want to be what’s considered “normal” nowadays. You want to keep a car an average 10 years. It will allow you to retire five years earlier and give you a lot less worry.

A rip-off that has been around for years was exposed again recently in a lawsuit against Ford Motor Company. When buying a car at a dealership, the dealer can mark up the rate significantly. People think the dealer has gone out and shopped the loan. But, in reality the dealer may secure a rate of 5 percent and jack it up to 14 percent when charging you. This practice came to light when it was discovered that car companies have been charging black customers much higher rates than white customers for some reason. Several lawsuits were filed against the companies, and Ford was one of the few automakers that fought the case in court. Well, a judge wasn’t having it and Ford has now had to pay up just like GM, Nissan and Chrysler. What you need to remember is that car makers make their money in the “F & I” department or “finance and interest” department. They don’t make much on the sale of the car. So, they are going to charge more for the financing. That’s why you have to do your homework. Get rates from a bank or credit union ahead of time. Then, go into the dealership and try to negotiate the interest rate on the loan. In that case, you are in the driver’s seat and you may get a better deal. Just make sure you do the work beforehand and know what you can get. Keep in mind that many auto insurers now make loans. So, get rates from you auto insurer and use that to your advantage, as well.

Clark is sick to his stomach about something he read in Consumer Reports. The trusty magazine recently wrote that more than half of the car loans people took out last year were for longer than five years. That’s outrageous! What happens to you when you take out a long term car loan? You will most likely be upside down on it for the life of the loan. Also, the longer the loan, the more chance you’ll be out of warranty when something goes wrong. So, what’s a reasonable length car loan? Consumer Reports says 36 months or less. Clark is willing to give you 42 months. But do not go beyond that! People take out these long loans because they want to get payments down to what they can afford. If you must go beyond 42 months, don’t buy that car. Get a used version or just accept it that you can’t afford it and get something else. You want to keep your payment affordable so you can pay it off instead of just paying on the interest.

More than half of all car loans in the United States are five years or longer, according to recent data. Just a few years ago, only a tiny percentage of people took out loans that long. And loans can be as long as 7 or 8 years! When you take out a long-term car loan, you always owe more on the loan than what the car is worth. It’s just how it works. Then, if you buy another car, you’ve got that loan on top of it. It’s never a good idea to take out a loan longer than five years. The longest you should have a loan is 42 months. If you can’t make the payments on a 42-month loan, you need to buy a cheaper car. That is Clark’s rule. Please put it into practice or you will be sorry.

The average car loan has gone from 48 months to 63 months just in the last few years. So, instead of being in debt for four years, people are in debt for five years. And some people are taking out six- or seven-year loans. In addition, the people who are buying these cars are often upside down in their current loans. So, you’ll end up owing money on the old car even after you’ve traded it in. It’s a recipe for disaster. If you learn your car is worth less than you owe, keep it. Even if you hate the car, you have to keep it. Kim, one of Clark’s producers, bought a truck a few years ago when finance charges were 0 percent. She was very excited about the deal at the time, but now she hates the vehicle. However, she’s sticking with it, even thought it has a five-year loan. Sometimes you just have to eat it. And if you’re looking at a car you really want but there is no way you can make the payments, you have to chose another car.

Most people take out a loan when they buy a new car, and that’s fine. The problems arise when people take out loans that are too long. Clark discourages loans longer than four years. Five years maybe, but six or seven is not smart. The shocking news is that people are starting to take out 8-year loans! That means that you buy a car this year and stop paying for it in 2012. That’s ridiculous. When you take out these loans, the lender must charge a higher interest rate because the risk is greater. People start to dislike their car and want to sell it soon after. So then they try to sell it and end up “upside down” in their loan. That means that you’re tired of the car at a point when you owe a lot more than what’s it’s worth. One car dealer Clark recently talked to said about 80 percent people are upside down in their loans. The national average is about 40 percent. The smart thing to do is to buy an older model or a cheaper car. When you have a desire to buy a fancy set of wheels, step back from it.

You will suffer a huge mark up in cost if you finance a car at a dealership. According to a Vanderbilt University study, 31 percent of white customers and 48 percent of black customers had their loans marked up. At GM, 28 percent of whites and 53 percent of blacks had their loans marked up. And at Nissan, 47 percent of whites and 72 percent of blacks were affected. Obviously, there is a racial component to all of this. But everyone’s loans are tweaked in some way at these companies. And an investigative report by the Detroit News found some shocking mark-ups. In one case, a customer was able to get a loan of 11 percent, but the dealership marked it up to 24 percent. If your credit is really solid, a dealer is going to have more difficulty marking up a loan. But if you have questionable credit, dealerships will take advantage of you more easily. The typical mark up is more than $1,000. So, you think you have gotten a deal on the car and then you end up paying an extra grand. There is nothing wrong with you making a profit, but you choose how much you’re willing to give them. So, make sure you know your credit score before you buy, and never let emotion drive you. Do your research online and compare prices. Clark likes to go to the dealership only to test drive a car and to take delivery of a car.