The credit crunch has already been affecting the automotive market for months, but now there is concrete evidence of exactly how bad it is. GMAC, the financing arm partly owned by GM, is restricting consumer auto financing to those with a credit score of 700 or above. Those are consumers who are considered to have very good credit.
They’re also looking to limit contracts with longer terms, like no longer than 72-month plans.
GMAC directly blames the credit market for the change, “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.”