Join Date: Sep 2007
Location: Pittsburgh-ish - PA
GM's Financial Arm GMAC Tightens New Car Loans
Adding to the gloomy economic atmosphere, GMAC, General Motors' consumer financial arm announced on Monday that is implementing a tighter policy for auto loans. The changes include limiting purchases to vehicle buyers with a credit score of 700 or above while the company will also restrict contracts with higher advance rates and longer terms. GMAC officials attributed the more conservative purchase policy for consumer auto loans to the lack of stability in the global capital and credit markets.
"These changes in pricing and underwriting are related to the current market environment, which has reduced access to funds and increased the cost of funds. The company currently expects these actions to remain in place until the credit markets stabilize and accessibility improves," said GMAC in an official statement.
Notably, last week GMAC also raised by 0.75 percentage points the rate it charges dealers for providing loans to consumers for vehicles that aren't part of any special incentive programs.