MISHAWAKA — The economy is hurting local car dealers. A recent report from Reuters says one in five dealerships could close in the next year.

From used cars to brand new ones, finding the money to pay for a new car is tricky, if not impossible. That means local dealers are struggling to stay in business.

For used car dealers like Bud Kendall and Ray Driver, closing a deal is much tougher than it used to be.

"Times are tough," Kendall said. "Can't buy cars, can't sell them."

Kendall owns Michiana Enterprise, a local used car dealership. Ray Driver owns the American Tire & Auto dealership in Plymouth.

"We're down probably 30-percent from this time last year," said Driver.

Both men say the explanation is because people are buying fewer cars and turning in fewer.

Most Tuesdays at 6 p.m., you can find both men at the Michiana Public Auto Auction in South Bend.

"They need to have what we like to call back row cars, which are the cheaper cars," explained Michiana Public Auto Auction Sales Manager Sarah Stroup.

The crisis on Wall Street has frozen credit, meaning used and new car dealers can't get the credit to buy as many cars for their lots.

Even the auction lots are emptier than usual, which means selling a used car isn't such an easy sell after all.

"I think dealers are holding onto their vehicles more because they're not selling the higher dollar cars as much," Stroup told WSBT.

A normal sale at Michiana Public Auction runs between $500 and $2,500.

That's one reason 17-year-old Kelsey Haas spent her Tuesday night there.

"[I'm] trying to get something under $1,000," she said. "Mom's trying to take us to work and school, and my other brother to work, so it's a very must have thing right now."

But for every car that sells on the auction block, another stays on a local car dealer's lot.

"It's rough," said local used car dealer Bud Kendall. "I don't know what else to do."

Michiana Auto Auction also says one thing you'll want to keep in mind before buying a used car — always budget for repairs. For example, if you buy a car for a thousand dollars, it will probably need a little work.