The credit crunch is the new oil crisis for America’s car buyers.

Consumer confidence has dipped to its lowest point since World War II, hampering U.S. auto sales even more.

Throughout it all, dealers have scrambled to find ways to finance a skittish customer base and restart stalled sales. Some key programs are helping, but the times defy logic.

Hoping to thaw frozen winter sales, GMAC LLC eased its restrictions in January to a 621 Beacon credit rating vs. the former 700-average score. That action was on the heels of GMAC securing a $6 billion federal emergency loan in January that opened the coffers for consumers.

Lack of consumer credit is a major factor in the market freefall, dealers say.

“All dealers are stressing programs that are important, but ultimately it’s the consumer who must feel comfortable; that’s when things will turn around,” says Mark Schienberg, president of the Greater New York Automobile Dealers Assn.

Sales-wise, January is the month that came in like a lion but went out like a lamb.

“It started pretty strong but was very challenged at the end,” Columbus, OH, dealer Chris Haydocy tells Ward’s. “Much of the problem was due to very inclement weather. We were down 28% in January.”

He sells General Motors Corp. brands exclusively. His total 2008 sales fell more than 20% over 2007, from 1,522 to 1,232 units. His Midwestern dealership almost mirrored GM’s dire situation. GM sold 24% fewer units year-ago.

GM and GMAC stepped up to the plate in February with aggressive finance and incentive deals, Haydocy says. “I think these deals and the potential (government) stimulus package will begin our long road back. September to January were the months of our discontent.”

Another big step was GMAC lowering its consumer credit ratings immediately after it secured a $6 billion federal loan package.

“That’s huge – that GMAC lowered the beacon score,” Haydocy says . “This is the first time since the federal TARP (Troubled Asset Relief Program) funds were passed that it benefits the regular middle class.”

Now it means that 11 out of 15 credit applications will go through, “compared to three with the former criteria,” Haydocy says, hoping that kind of action will fuel positive consumer thinking.

Auto makers, unions and dealers have been hard hit by the sales downturn, Haydocy says. “It’s been a shared sacrifice. Dealers have given more than anyone can imagine.”

He expects no miracles from the federal bridge loans, but says the new deal gives GM “a window of opportunity” to go back to the table, restructure and work things out.

Unlike many U.S. dealers, Utah-based Greg Miller is well-positioned. He wasn’t singing the sales blues when he looked at 2008 results in his mega-dealer chain.

Greg Miller is CEO of the Larry H. Miller Group that sold 70,000 vehicles last year, but the pace is somewhat off now.

The group, No.10 on the Ward’s Megadealer ranking, has 40 stores in Utah, Arizona, Colorado, New Mexico, Idaho and Oregon. It employs about 6,000 people and represents all major brands. Greg’s legendary father, Larry Miller, who died in February, founded the enterprise.

“Overall, 2008 was a good year for us, considering 2007 was so phenomenal. We saw profits in sales and volume any way you slice it,” Greg Miller says.

Tightening market conditions have “not taken us out of business, just made us better,” he says. “Banks are still willing to lend. They’re just reviewing applications more closely than I can ever remember.”

The current lending climate is an “overcorrection” to highly lenient lending practices of the past, he says. “It finally caught up with the banks, and they are readjusting to more appropriate levels of spending.”

Of domestic auto makers, Ford Motor Co. has taken the most significant steps to correct their problems, he says. “They’re in the best position to weather the economic storm. In another year, they will be back in a position of strength.”

The Miller enterprise owns four Ford-Lincoln Mercury stores and four Chrysler group stores.

Miller also offers subprime financing in 24 states through Prestige Financial Services, its Salt Lake City affiliate, which approves about 1,600 auto loans a month.

“A number of factors converged to get us into this economic mess,” Greg Miller says. “We need to go back to basics and work through this anxiety and tension that’s keeping people in fear.”

Since early January, credit unions also have stepped up to help finance consumers in the downturn.

After initial pilots, GM and Chrysler LLC have expanded credit union finance initiatives to all 50 states to offer low-cost loans and special pricing incentives to credit union members.

That opens up more than $160 billion in credit union funding for members of more than 7,800 credit unions nationwide, according to the Michigan Credit Union League.

Wanda Howell, a dealer since 1996, operates Cronic Cars, a dealership chain founded by her father. It sells Chevrolet, Cadillac and Nissan brands in Griffin, GA.

Cronic has turned to credit unions, local banks and other lending programs, including self-finance programs.

Since GMAC comprises about 50% of its financing, customers had difficulty securing loans earlier. The dealership also beefed up its “buy here, pay here” efforts offering special financing for less expensive and high-end used vehicle buyers.

Howell cites the old saying, “What’s good for GM is good for America,” and says its counterpart is true, too: What’s bad for GM is bad for America.

“People are very distressed,” she says. “Atlanta is hard hit on the charts. Everywhere I go, I hear talk of layoffs, people losing their jobs. We’re right in the middle of the storm.

“We’ve seen less interest in Cadillac with our affluent customers, who are taking stock of their portfolios, which are in horrible shape,” she says, expecting credit will loosen up this quarter. “We hope there’s a better message out there in the future.”

Dealer Manuel Gonzalez of Sterling Auto Group in Bryan, TX, blames risk-adverse financial institutions for much of the slump.

“Sales have been declining, so trade values have (decreased),” says Gonzalez, a Cuban native and co-chairman of the GM Minority Dealer Assn.

He has seen his new-car sales (Cadillac, Buick, Pontiac, GMC) decline about 11% in 2008 compared with 2007 and things aren’t looking great this year so far.

“Lenders are being very conservative in the money they are willing to advance consumers (and dealers) for specific vehicles,” Gonzalez says. “Those dealers who have diversified sources of bank, credit and captives have had more success in overcoming the negative market conditions.”

He believes GMAC’s loosened credit restrictions will “help sell more cars.”

Dealers also have been hurt personally by the lack of financing from lending institutions.

“It’s absolutely brutal and unfair,” says Augi DiFeo, who owns White Plains Chrysler Jeep Dodge in White Plains, NY. “We live in a world of extremes. Lenders have run the gamut from earlier being overly lenient to now being overly harsh.”

Despite serving an upscale market region, DiFeo, like other dealers, has been unable to secure loans for his business and expansion needs.

He has been waiting since last July for a bank loan to start building a new Hyundai dealership near his current facility.

“It’s a dealership that’s in the wings,” DiFeo says. “We’re still pending floor- plan source approval.” Meantime, he’s been renting a temporary facility which does not meet his floor-plan needs.

While Chrysler is struggling, some dealers say they are being pressured to order excess inventory that they can’t move.

Jordan Fraiser of Bessemer Chrysler Jeep Dodge in Birmingham, AL, looks at it another way.

“Chrysler needs to get their plants up and running,” he says. “If dealers get a good marketing game plan together they’re going to come out fine. We have to try to be proactive. This is the hand we are dealt, and we need to support Chrysler in every way.

“After the (presidential) election, people feel better – like there’s hope out there.”

Increased auto sales depends on the economy and governmental stimulus, says Dale Pollack, a former GM dealer turned dealer consultant and founder of vAuto, a dealer-support firm.

“I really don’t think that anyone can accurately assess the expected timing of the improvement at this time,” he says. “Short term, it’s about affordability and access to credit. But long term, it’s all about producing desirable products.”