Gonna be hard to get auto loans from GMAC

[ralbusta]

It's gonna be hard to get auto loans from GMAC. I read this in an article:

"GMAC said Monday it would only make auto loans to people with credit scores of 700 or above."

Looks a new card is out the window for me. lol.

[cobra19]

In my neck of the woods, Tier A credit is 750 as advertised by both our local GM and Ford dealers.

[wmarat]

Well, GM and Ford are off my list.(Frankly, they have never been on.)

[marty56]

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@cobra19 wrote:
In my neck of the woods, Tier A credit is 750 as advertised by both our local GM and Ford dealers.

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Last time I was in NY (spring), I also saw some adds  saying you needed a 750 or better for a loan at their best rates.

IMHO I dont think this policy will effect the pruchase of cars too much since the chances are good that the dealer will be able to find someone a loan who could have gotten one prior to all this Wall Street mess but perhaps at a higher interest rate or larger down payment.

[Anonymous]

By requiring a larger dwon payment, they are automatically affecting the purchasing of cars.  I have not put money down on any of the last 6 cars I have bought.  Why? because it was cheaper to pay the money on the car loan a 6% and take my down payment and pay off some different debt, or pay down my student loans.  I still paid al lthe cars off early though.  Anyways, with cars being as overpriced (probably more so than homes even) putting 15-20% down will make it alot harder for people who are struggling to buy a car.  Alot of dealers are getting hit with 90% LTV limits and since most people finance the sales tax as well, that is the equivalent of 15-18% down to pay the sales tax an 10%.  Now take a 25K car and you are talking 4-5K down payment for a good loan.  There are options out there though, but this does have an affect.  

[dilligaf_racing]

With alot of CLD's going on, people with good credit and higher scores before, may now have lower scores due to Util percentages. So their actual credit worthiness may have not changed, but the lower scores may keep them from qualifying for loans. Are the underwriters going to take this into consideration? They still need to sell cars. 

[Anonymous]

We are in a classic overreaction.  There is no reason that GMAC needs 700+ fico for car loans.  Higher down payments and clean recent (12 month) history would be acceptable ways to guarantee people down to the mid to low 600's and service you customers while being financially prudent.  That said, GM just doesn't have access to the capital to continue loaning out money.  THey have priced their cars out of reach and at the same time are limited in financing these cars which is the only way most people can afford them.