Auto-Train Corp. cut its losses in half for the third quarter, with a 33 percent increase in revenues. But the company showed a $795,000 deficit for the quarter.

The Washington-based railroad's loss equalled 48 cents a share for the quarter, down from $1,596,000 (97 cents) a year ago.

A dramatic increase in passenger traffic on Auto-Train's Virginia-to-Florida service boosted revenues from $4.3 million to just over$6 million for the three months ended Sept. 30.

For the first nine months of the year, Auto-Train showed a loss of $1.43 million (87 cents), down from $1.58 million (97 cents).

Auto-Train President Eugene K. Garfield said more than half the losses -- $430,000 -- came from start-up costs of the company's new subsidiary, Railway Services Corp., which builds and repairs rail cars.

Garfield said the Auto-Train itself lost $394,000 during the quarter and made money during the months of July and August. The railroad has never shown a profit during September, the low point of the Florida tourist travel season.

"We feel we are turning it around," said Garfield, who has been struggling for nearly three years to get the railroad he founded out of the red. "We still have cash problems and we still want to get some financing," he added.

At the company's annual shareholders meeting last summer, Garfield predicted Auto-Train would issue new stock or secure additional capital by the end of November. In an interview yesterday, he conceded that self-imposed deadline would not be met, but said "we are proceeding with the financing . . . we are working on an underwriting."

The need for new financing to keep the railroad running was made clear by Auto-Train's quarterly report to the Securities and Exchange Commission, which revealed that $1.5 million of a $3 million loan from American Security Bank is past due. The bank has agreed to extend the due date of the loan to Jan. 2, 1980, the report shows.

Auto-Train is still 90 days behind on payments on another loan to Commercial Credit Industrial Corp., and is behind on payments to Riggs National Bank by more than half a million dollars.

The quarterly report also shows the company also has made little progress in meeting an Interstate Commerce Commission order to repay $800,000 in refunds to passengers who paid for Auto-Train tickets, then cancelled their trip.

Although Garfield said in the interview, "We are paying the refunds back as rapidly as we possibly can," the amount due passengers has declined only from $826,000 to $800,000 in the past month.

The quarterly report says Auto-Train is asking the U.S. Department of Transportation's Federal Railroad Administration for a government-guaranteed loan of $4.5 million to refurbish its trains. The Economic Development Authority of the Department of Commerce turned down an Auto-Train request for a loan guarantee last summer.