The auto industry is getting sideswiped by the housing crisis. Auto lenders and banks, closing their wallets, have prevented hundreds of thousands of consumers from getting the financing for a car. Home equity loans, which had been used in at least one of every nine deals, when lenders were more generous, are no longer a source of easy money for many prospective buyers. And used-car prices have fallen nearly 6 percent as repossessed cars and gas-guzzling trucks and S.U.V.'s flood auction lots.

Those forces, on top of the softening economy, are putting enormous pressure on the American auto industry as it faces what may be its worst year in more than a decade. About 14.95 million vehicles are expected to be sold in 2008, down from 16.2 million last year, as sales reach the lowest levels since 1995, according to the marketing firm J. D. Power & Associates.

The impact on the broader American economy could be profound. Not only is the car a consumer's second biggest purchase after the home, but the auto industry remains one of nation's most important economic engines. With less money available to fuel the industry’s growth, the businesses that support it are also facing the prospect of a sharp slowdown.

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Car dealers and manufacturers will probably face months of weaker profits as they offer more incentives to sell new vehicles. Luxury car sales, which provide outsize profits for auto companies, are off 13 percent from last year, according to the Autodata research firm. And consumers, facing potentially higher mortgage payments and $4-a-gallon gas, are delaying purchases of midmarket cars.

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The sharp drop in resale prices has also meant bigger losses for the lenders as recovery values decline. It has also taken its toll on high-end automakers, which lease many of their cars. BMW, for instance, took a $375 million charge after it was stuck with thousands of cars with resale values that turned out to be lower than it projected.