Just a few years ago when credit was easy to come by and the housing market was over inflated, it wasn’t rare to see an average earner rolling around in a luxury car that should have been a few rungs out of reach. But the market has come crashing down in recent months, with even the most qualified buyers getting turned down for a new car loan. And the situation only looks like it will get worse.
GMAC announced on Monday that it will no longer be extending credit to individuals with credit scores below 700. The news comes just days after GMAC announced that it will no longer be offerings loans for longer than 60 months.
According to Automotive News, 74.3 percent of new car shoppers have the requisite 700+ credit score to qualify for a GMAC loan. With a consumer base shrinking by the day due to other economical concerns, a 25 percent decrease in potential buyers is the last thing General Motors wants to see. But with repossessions expect to reach record highs next year, the move is definitely a necessary safeguard for GMAC.
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This is ridiculous. It does not bother me that GM might be affected by this because I dislike them but, I think 700 is a pretty high number.
Actual Comments-
America failed is because of the credit system. No matter how high the credit score you have, you will still be broke when the bad time comes.
jimmy8
This is really sad. There are a lot of people that never miss a payment that are in the mid 600 range. They just have a lot of credit out there. A home loan, 2 car payments, and a couple of credit cards and you are below 700. This is your typical middle class American family. Sad that these people who never miss a payment will now not be able to get financed thru GMAC, and lets not even start with first time buyers…. If I was Ford, I would have a Ford Credit Rep sent out to every GM dealership in the country offering them financing. Sure would be funny when families are financing their brand new Chevy’s thru Ford Credit!
Get Real(i like this guy)
Less finance means less sales which means less production.
GM is going to die, cars are counted as profit OUT the assembly building door…NOT when sold.
elviososa