Auto sales are improving because of some economic strides, a wave of new products and, in no small part, greater availability of consumer credit.

When the credit industry collapsed in 2008, it took the auto industry down with it. That’s because people who can’t get auto financing don’t buy cars.

But the credit freeze has thawed out, with lending becoming more consumer-friendly but still conditional, analysts say.

“We’re pretty close to the point I would call ‘prudent lending,’” says CEO Jeremy Anwyl. “Lending criteria have loosened, but borrowers have to be employed. They still have to have money to put down.”

The domestic auto industry rebound is aided by cleaned-up financial statements, new products and opened-up lending, he says. “General Motors and Chrysler are building back semi-captives that allow more flexible but still prudent lending practices.”

Before the recession, credit was easy to come by. It helped auto sales but also buried a lot of consumers in debt.

“The benefit of hindsight shows that credit was actually far too available,” Anwyl says. “Eventually the marketplace corrects itself. For a short time, it even over-corrected, which made credit criteria too restrictive.”

Consumer credit “has reached a middle ground between the easy-money days of the early and mid-2000s and the disastrous credit lockup that occurred in late 2008 and continued into 2009,” says Jack R. Nerad, executive editorial director and executive market analyst at Kelley Blue Book.

He adds: “The banks and credit markets have largely sorted themselves out, which means credit is flowing to car buyers again. This has fueled the sales increases. The economy is still weak, but the upside of that for prospective buyers with good-to-excellent credit is that car-loan interest rates are very favorable right now.”

Many Chrysler dealers believed they were less competitive without a captive finance group to rely on during the economic meltdown of 2008 and 2009.

But prospects are looking better after Toronto Dominion Bank this year acquired the former Chrysler Financial from Cerberus Capital Management for $6.3 billion.

The newly formed TD Auto Finance brand “represents both the financial stability and renowned customer service of TD and the deep experience and partnerships of the former Chrysler Financial,” Thomas Gilman, the new unit’s CEO, says in a statement.

“It’s all in the execution, but the potential is there for success,” Anwyl says.

Gilman worked with Chrysler for more than 30 years. He helped engineer the latest dealer expansion efforts to serve Chrysler and Fiat dealers as part of its dealer- services outreach.

In June, TD Auto Finance began ramping up its dealer ranks. Since then, more dealers have been brought into the fold. Toronto Dominion’s banking group serves more than 5,000 dealers and 75% of those were non-Chrysler Group dealers, according to the bank.

Many Chrysler-brand dealerships have enjoyed solid relationships with TD in the past, says Wade Henry, finance director with Larry H. Miller Chrysler Jeep Dodge in Sandy, UT.

He expects that to continue under TD Auto Finance. “They’ve been a great bank to work with and provide lending across a broad spectrum of services,” he says.

The dealership’s finance manager, Marian Ciubotaru, says credit restrictions are easing and customers with credit scores of 680 or higher still can qualify readily. With others, it’s still touch-and-go.

Consumer credit may be easing up, but it has a way to go before it returns to peak times, says Thomas Miskell, general manager at Galeana Automotive Group based in Warren, MI.

“I don’t want to paint a Pollyanna picture of the economy, since people are still being turned down for credit,” he says. “It still could get better. Finance arms are still going to have to continue to lower the bar a bit for buyers.”

Paul Taylor, chief economist for the National Automobile Dealers Assn. believes TD entered the market at the right time for dealers, consumers and the bank system itself.

The timing “is fortuitous for banks to go into floorplan financing as well as light-vehicle financing because the shakeout in the industry is in the rear-view mirror, and growth of new car and light-truck sales will be on the uptrend,” he says.

Chrysler closed more than 750 dealerships as part of its bankruptcy reorganization. Many others closed on their own due to economic hard times.

“Dealerships still in operation should enjoy a relatively stable growth period ahead,” Taylor says. “So the timing seems correct for this venture into financing U.S. new-car dealers at a time when Chrysler sales are doing very well in Canada, as well as the U.S.”

TD Auto Finance seems off to a strong start. “Dealer and customer feedback for our products and programs has already been overwhelmingly positive,” Gilman says.

One of Michigan's largest Chrysler-Dodge-Jeep-Ram dealerships, Golling Motor Sales, opened its second Fiat store in the Detroit suburb of Birmingham and has started shifting its financing and insurance business to TD Auto Finance.

“There's a buzz arising on the Fiat 500,” says dealer principal Bill Golling. “We haven't hesitated in adding a Fiat store adjoining each of our two Chrysler-Dodge-Jeep dealerships. The TD Auto takeover of Chrysler Financial comes at a time when we're surging in new-car and used-car sales.”

Golling’s 22 salespeople at his sprawling Bloomfield Township, MI, flagship store have found the transition of finance and insurance sales from Chrysler Financial to TD Auto “without glitches,” says new-car manager Marty Knudsen.

– With Mac Gordon