Meridian Ford has 200 cars on its lot. What it lacks is customers.

"Nobody is showing up to buy a car," said Larry Chetwood, part owner of the dealership.

Smartt Cars in Caldwell had about 15 customers in the first two days of last week. Only one could qualify for financing.

"The only people coming to buy are people who shouldn't be spending any money," said owner Geoffrey Smartt.

Idaho car dealers have hit their worst sales months in recent memory this fall as tightening credit, volatile gas prices and financial jitters keep consumers out of Treasure Valley showrooms. The market has not been this depressed in 25 to 30 years, said Trent Wright, executive vice president of the Idaho Automobile Dealers Association, which represents 110 new car dealerships in Idaho.

He predicts it could be 18 months before the industry recovers in Idaho.

Despite grim reports nationally of frozen credit, Idaho dealers and some lenders say car loans are available through regional and community banks, credit unions and other institutions to people with good credit ratings and stable jobs.

As dealers cut prices with rebates and other incentives to move their inventory, "it is probably one of the better times to buy," said Greg Taylor, owner of Taylor-Parker Motor Co. in Sandpoint and Idaho new-car dealers' elected representative to the National Automobile Dealers Association.

The sharp downturn in auto sales hit with such ferocity that many didn't see it coming just two months ago. The falloff was so severe that dealers once planning $10 million expansions suddenly found themselves focused on meeting payroll, Wright said.

Title transfers for new and used vehicles in the Treasure Valley - an indicator of car and truck sales - fell by two-thirds in September over September 2007, according to an analysis by the Idaho Statesman marketing department of data from the Idaho dealers association.

Nationally, the trend is down, too.

In 2007, dealers sold 16.1 million cars. For 2008, National Automobile Dealers Association economists predicted that would fall to 14 million. Now they're projecting 13.7 million.

SHAKY CONFIDENCE

The unwillingness to buy cars - even at lower prices and with some credit available - is a sign consumers aren't eager to make long-term dollar commitments in the midst of a financial meltdown, said John Church, a Boise economist.

"They are reluctant to take on debt," he said.

Many are holding back because of the paper loss in the value of their homes as house prices drop, said Paul Taylor, chief economist for the national dealers association. And some of the easier credit that consumers once could access - pulling money out of home equity to buy a car - is drying up as banks clamp down on home lending.

CUTTING PRICES

It's not that dealers aren't trying. Some are pushing zero-percent financing. Manufacturers, such as Ford Motor Co., are sweetening the pot with rebates that, along with other incentives, are knocking up to $7,200 off the price of a pickup, said Bill Robertson, the general manager at Meridian Ford, 250 E. Overland Road in Meridian.

Still, new-car sales are down 40 percent at Meridian Ford through September of this year, compared with the same period last year.

Even with a sales slump, car dealerships still have bills to pay. Chetwood has a $4 million loan to pay for his inventory. That's down from a previous loan of $6 million a year ago.

The slow economy makes for quieter days for car salesmen like LaMar Childs, who has been selling cars at Meridian Ford for about 13 years. In the good years, Childs could sell 12 to 14 cars a month. Now he's down to about eight.

With fewer customers, Childs says he has to be ready with a good demonstration of a vehicle's assets the moment a customer hits the lot.

"You have to make them fall in love with it then and there," he said.

Chetwood said he has weathered occasional economic downturns in his stint in the car business over the past 33 years, but nothing like this.

The sales slump is taking a toll on his staff. Chetwood has laid off five employees and has found that keeping employee morale up is becoming a big priority.

"We cheer a lot," he said.

Lately, they've found some good news.

Skyrocketing gas prices - which brought many customers in to trade fuel-guzzling vehicles for more efficient cars - are starting to ease, Chetwood said. But gas prices will have to stay low for a while before customers feel comfortable, he said.

At Meridian Ford, the Focus, a four-cylinder car that gets about 35 miles to the gallon, is eclipsing the larger, less fuel-efficient Mustang for customer favor among sedans.

Trucks, especially the F-150, remain the top-selling large vehicles.

Smartt's store at 6122 E. Cleveland Blvd. in Caldwell specializes in used cars costing between $2,500 and $4,500.

Many of the people showing up on the lots have already had two or three cars repossessed, said Smartt, who is president and executive director of the Idaho State Independent Auto Dealer Association.

"We are definitely cutting prices," he said. "We would sell a car if we made a dollar."

SOME LENDING TIGHTENS

Dealers are looking for ways to move cars with financial deals to bring in customers. But some lenders are making borrowing harder.

"Similar to everyone else in the industry, Wells Fargo Auto Finance has tightened underwriting standards to effectively manage risk in this difficult credit environment," said Amy McDevitt, a Wells Fargo spokeswoman in Boise.

Wells Fargo reported an increased loss in its auto loans in the third quarter of 2008 over the second quarter.

Church isn't surprised that some larger banks in the country are tightening car lending. Some are seeking to shore up their own balance sheets in the wake of the credit debacle.

But smaller banks - many of which weren't part of the subprime mortgage market or didn't buy toxic securities - are in better shape to make car loans, he said.

"They are not lending money on houses," Church said. Auto loans "are a good thing for them to the extent they can still do that."

Credit unions - which appear largely unaffected by the financial crisis - also are making car loans, said Valerie Brooks, Idaho Credit Union League director of regulation and governmental affairs.

Their car-loan rules have not changed over the past several months even as credit tightened. Between 40 percent and 60 percent of credit unions' loan portfolios are in vehicle loans, Brooks said.

Some loans require a down payment. Others do not. Interest rates for people with good credit are running between 4.99 and 6.45 percent, Brooks said.

Smartt said some of his lenders - which have interest rates ranging from 8.99 to 13 percent - are looking for business.

But none of that matters to car dealers if people aren't showing up to shop.

In 2006, Smartt averaged 38 cars sold a month. This year, it's down to 18.

"People are staying home with their money," he said.

Bill Roberts: 377-6408