Washington area lenders, fearful that the economy is headed for a slump, are making it tougher for local auto dealers to get business loans, and for their customers to get financing to purchase new cars.

The tighter credit policies could force some of the weakest dealerships in the area to file for bankruptcy, according to local banking and auto industry sources.

"If a dealer is doing a good business and especially if he has good cash flow, he's not going to have any trouble getting loans," said John E. Taylor Jr., president of Alexandria Toyota Inc. "The people who the banks will turn down and who might have to close up are those dealers who just aren't managing their businesses properly." Most vulnerable are smaller dealerships selling a single make of cars, industry experts said.

Banks say they are worried about lending in an environment where unemployment is creeping upward and consumer confidence is declining, factors that have combined to drag down car and truck sales for more than a year.

Area car sales dropped 8.7 percent in 1989 from the year before, and truck sales fell 5.5 percent. Local car sales, with incomplete reporting from the District of Columbia, so far are down 3.9 percent in 1990. Truck sales are off 8 percent.

No one is predicting disaster in the regional auto-retail industry. But the days of easy credit, which helped fuel auto sales throughout most of the 1980s, have ended in the Washington area for the foreseeable future, several lenders and dealers say.

Car buyers who owe more on their cars than the cars are worth will have a tougher time now trading those cars in on new ones. Similarly, dealers experiencing serious cash-flow problems will find banks reluctant to put up money to help them over the fiscal hump.

"Banks today are less willing to take risks," said Jim Ghrist, general manager of Stohlman Volkswagen Subaru on Leesburg Pike in Vienna. "With all of those real estate loans going sour out there, the banks have become a little bit more apprehensive in approving loans. They're still lending money, but they're not winging it the way they were doing a few years ago."

That means people who qualified for an $8,000 loan to buy a Hyundai car two years ago will come under more bank scrutiny today, said Donald L. Reilly, general manager of Fairfax Hyundai in Fairfax. "The banks are being very cautious," Reilly said. "The kinds of credit they were approving as late as 1987 and 1988, they're not approving today."

Gone are the days of no-down payment and minimum down payments in bank financing of new-car purchases, Reilly said. More typical now is for a bank to require as much as 20 percent down and to accept only customers who have a solid employment history of three to five years, lenders said.

Richmond-based Crestar Bank this year stopped making auto loans completely, either to dealers or to customers trying to buy new cars. "Two or three years ago, we saw our losses increase dramatically on car loans," said William C. Harris, Washington-region president of Crestar Bank. "We just couldn't make a profit on car loans."

Crestar decided to leave the auto business in part because the bank was unwilling to compete with the finance arms of auto companies, which have been offering cut-rate loans and rebates to help overcome soft car sales.

Mounting defaults by borrowers also played a role in Crestar's decision to exit the auto business, said Harris.

One indicator of the rise in default rates in the area is the increase in the number of overdue auto loans. According to the American Bankers Association, 1.16 percent of bank-backed dealer loans are delinquent in the District, compared with 1.02 percent in the same period last year. In Maryland, the delinquency rate moved from 1.64 percent last year to 2.42 percent so far this year, enough of a change to prompt some lenders to tighten credit.

Most delinquencies and defaults are coming on long-term auto loans, which now average 54.2 months on new cars compared with 48.3 months in 1984, according to figures compiled by banking associations.

"Bankers, as a group, were never crazy about long-term financing," largely because it encouraged customers to buy cars they otherwise could not afford, said Virginia Stafford, spokeswoman for the American Bankers Association.

"A lot of bank lending to auto dealers is based on the value of the dealership's real estate," said Fritz Elmendorf, a spokesman for the Consumer Bankers' Association in Arlington. To the worries about real estate values, add falling auto sales, "and what you get is a double whammy" affecting banks' willingness to lend money to auto dealers, Elmendorf said.