Citing tough economic conditions, GMAC said on Oct. 13 it would pull back from riskier and longer-term auto lending in response to tight credit conditions that have limited its access to funds.
GMAC, the finance company affiliated with General Motors
Corp, said it would be more conservative in extending car loans, restricting
U.S. consumers with credit scores of 700 and above, and to shorter terms.
The company said it expects the restrictions to remain in place until credit markets stabilize.
GMAC also said it has increased the rate it charges car dealers for providing standard auto financing by 75 basis points.
GMAC’s wholesale auto finance business is not affected by the changes.
Detroit-based GMAC lost $2.48 billion in the April-June period, hurt by losses at its mortgage lending unit ResCap and write-downs on the value of leases for sport/utility vehicles.
U.S. auto sales for September sank to a 15-year low. Industry executives and auto analysts have said they are not seeing any rebound in U.S. auto sales so far in October.