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.
