Car buyers, in particular those with poor credit ratings, are feeling the effects of the collapse of the home mortgage market when seeking automobile financing.

More high risk buyers are beginning to become delinquent on their auto loans or they are defaulting altogether, adding to the overall weakness of the credit market in the United States.

Many budget-conscious consumers, fearful of going deeper into debt, have begun to defer buying a new car or truck, causing industry analysts to begin to downgrade their 2007 sales predictions.

The National Automobile Dealers Association lowered its sales expectations for 2007 from 16.5 million to 16.1 million units. Other analysts, like Dennis Graham at Plante and Moran, said sales could dip below 16 million making 2007 the worst sales year since 1998 when sales stood at 15.6 million.

Additionally, some lenders are beginning to raise interest rates for subprime buyers. At 7 percent, a $20,000 car loan paid out over four years will cost the consumer approximately $880 more over a 5 percent loan.

Last week Alan Mulally, CEO of Ford Motor Company said, "Outside of a home, a car is one of the biggest things we purchase. When you look at all of the things that are happening right now in the United States, it's a watch item. It's something we really have to pay attention to."

The prospect of lower sales is not a good sign for an already embattled American auto industry struggling with internal restructurings and union negotiations in an effort to catch up with their foreign competition.