Car loans have become the latest victim of the recent credit woes affecting the United States, Great Britain and Europe.

As a result car sales have fallen dramatically across Europe with all the major car manufacturers affected by the lack of car loans available.

Consumers are also cautious about investing in a new vehicle even if they can secure a car loan at a good rate as fuel prices reach record highs and running costs in all countries rose.

Overall, sales across Europe fell by 7.8 per cent in May, with Western Europe the most badly hit with sales falling by 8 per cent. Previously new EU member states in Eastern Europe had been able to offset falling sales in other parts of Europe; however, in May Eastern Europe was also hit as sales fell by 4.2 per cent.

With credit becoming increasingly tight and fuel prices seeing a rise as high as 11 per cent, most manufacturers are blaming these conditions for their poor fortunes in recent times.

Goldman Sachs analysts said in a note to their clients that auto manufacturers face rising raw material costs and current foreign exchange rates.

"We adjust estimates to reflect a more protracted slowdown in global car sales," they said. "We also incorporate significant increases in raw material costs and current foreign exchange rates in our 2009 estimates."

Other industry experts have suggested that recent strikes by lorry drivers over increasing fuel prices are having a negative impact on sales as well. They say that June's sales will see the consequence of new cars and deliveries not being received due to the lorry driver's strikes.

Sources:-http://www.onlyfinance.com/Loans-News/