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Auto finance and mortgage company GMAC said on Monday it would be more conservative in extending auto loans to U.S. consumers because of the lack of stability in the global capital and credit markets.

"The changes include limiting purchases to contracts with a credit score of 700 or above," GMAC said in a statement, adding that it will also restrict loan contracts with longer terms.........

More at link:

http://money.aol.ca/article/gmac-to-limit-car-loans-to-buyers-with-good-credit/378673/
 

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What? You mean you have to actual live with in your means? Get out of town.

This is how it should of always been.
 

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a non event since even the best credit clients get 8.25% and any bank will give 5%. further, GMAC to limit advance to invoice amount only. no more rolling negative equity and you better have a downstroke for the taxes and fees. in essence, GMAC is out of the game completely. we send them no business other than Certified Used that have rate buy down availability. shortly we will be dropping them as floorplan. who needs 'em anyway?

it used to only appear Red Ink Rick wanted to take GM apart, now it appears he is insisting on it. goodbye Grand Rapids, Janesville, Moraine, and others. the legacy of RIR is growing like a terminal cancer. how long can the Board continue to allow this guy to destroy General Motors?
 

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Yep, but the sad thing is most American's don't care, and are genuinely disinterested or say it's impossible to buy American. When the fact is they don't care, thus they don't try or have any vested interest in attempting to do so.
 

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You just know some group is going to chime in on how this is "racist"......
I was thinking the same thing.

If lending institutions had been lending according to who can afford it then the country wouldn't be in the state its in.
 

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Sounds like I got really lucky then......when I bought my car, I pretty much had no established credit history (I do now that I've started paying on it...also start paying back student loans in a month), got 6.9% financing through them and didn't need my dad to cosign at all.....:yup:
 

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What??????????

Limiting loans just to those with good credit?

Whoduh thunk it?

Leave it to GM to break new ground in lending practices...
Yeah, shocking idea, isn't it? Time to get back to the old days, when people saved for a down-payment and paid-down their credit cards.

When my wife and I got married (something like 100 years ago), we saved 20% of the cost of the house as a down-payment, which was fairly common then.

Hopefully people will not forget the banking meltdown of 2008 and won't give loans away.
 

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Another group of shoppers sent away from GM and Chrysler's door. 'Beat it, Scram, Get outta here.!'

HOwever the bigger issue IMO that will be affecting vehicle sales in the coming year or two will be the much tighter credit restrictions on debt-to-income ratios and the general refusal of lenders to lend more than 'book' or MSRP. Rolling in negative equity will be a thing of the past, the good ol' days of the 90s and early part of this decade. This obviously is what is needed to make people stay within their means but it will reduce sales volume of new vehicles. I see the volume of used vehicles potentially growing however.
 

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Excellent it is about time, they really needed this at the beginning. All they were doing before is screwing over those of us who already have an excellent credit score by allowing those who didn't before.

I could get a loan through them but my Credit Union has better deals. Just because you can get a loan through them doesn't mean you should (in my experience).

IMO they need to be more competitive, and hopefully with this change they will be able to do that. And for those who think it will be bad for everyone, shop around, most all dealers I have been to have many different banks on hand to allow you to get a loan. This isn't meant to drive people away.
 

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GMAC is de facto out of leasing due to high lease rates, and there normal loan rates are much higher than regular credit unions and other sources which means they are de facto out of regular car loans. GMAC is hoarding cash to raise capital rates at GMAC. Why would you get a car loan from GMAC for new G8 pontaic at 6.9 %- 8% when the going outside rate is 5%. cerubus the three headed dog does not care about car leases or loans, they only care about selling this pig (Chrysler)to a sucker and they are going to put the lipstick on by raising the capital ratio by hoarding cash. Use GMAC only when the rates are equal or better than other souces such as banks and credit unions.
 

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amazing ..talking merger...with cerebus.....who has controling interest in gmac and chrysler.....examine cerebus...who do they really represent...everything they touch ..they kill ...who are their investors and what their intentions....seems like some investors are getting taken for a ride.....the only way out of this ...is business and volume....by the way last time I checked......680 was a good score.....i guess good is not enough or say 30 year history with gmac ....means nothing....everytime i believe i have lived long enough to have seen it all ...well ou know the rest.......wow
 

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So what will GMAC do with first time buyers that don't have a long credit history? I am sure everyone on this board remember trying to buy a new car for the first time. But how quickly folks forget.
I am not saying that GMAC should lower it's standards to just let anyone have credit but this should be on a case by case basis.
Everyone has made mistakes in their life and sometimes the credit score doesn't reflect the potential to pay off a loan.
 

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Everyone has made mistakes in their life and sometimes the credit score doesn't reflect the potential to pay off a loan.
They do not care about you paying back the loan. They care about who they can sell your debt obligation to. IF you have a low credit rating then they can not sell your loan for a good price (low quality q-tips are cheaper than premium q-tips also!).

Good people make mistakes but you only have one report card and your grade is your grade.
 

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I agree with GM's decision, but a core part of GM's business comes from people who probably couldn't afford to buy unless they went with extended term loans. I used to be a salesman for a Chevrolet dealer (an unethical one, it appears...anyone heard of Rancho Motor Company? -smirk-) and GM has the largest share of African American owners, period. I'm waiting for the NAACP to star6t screaming about racist lending practices.

I just purchased a used 2004 Pontiac GTO with 42k miles at Greiner Pontiac Buick GMC. I have good credit, am a homeowner with positive equity (whodathunkthat) and put a bit of cash down. The Pontiac dealer was literally falling all over themselves to earn my business for the third time. I mean they were really desperate. How desperate? I looked on my sales managers board and I was the THIRD car he'd sold this month. THE THIRD.

GM is ****ed.
 

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After 31 years of selling GM Vehicles and prefering to have them financed thru GMAC and this is the way they respond. They just lost my allegiance.
That's pretty fickle. I guarantee you aren't old enough to have enjoyed the Great Depression. At this point, I don't think GM has a choice. The company can barely borrow money to stay alive, let alone lend to people that own their cars for 6-8 months and then hand the keys back to the bank.

Buying a new car on credit is a luxury not a right. If you have customers that shouldn't be buying new you should be using your strategies as a salesman to work them into USED. That's simple Salesman 101, bud.

I hate to say it, but most people want wine on a beer budget. Just because gee-mac had a habit of lending a $34,000 LT2 Avalanche to a customer with two BKs and a 580 FICO for 84 (or dare I even say it, 96) months doesn't mean that they SHOULD HAVE THE RIGHT.

An idiot like that should buy used for a short term.

I was commissioned sales at Rancho Motor Company. Of course, if I didn't sell a car I didn't get paid. I sold a Suburban to a family that was trading in their paid-off 2002ish Chevrolet Astrovan. It had a lot of miles, in the are of 130k if I remember correctly. They wanted to own a Suburban. Fine. I'll sell them what they want but I ended up feeling really bad about it. Thing is, I had a 4 month old son at the time. Here's their situation: bankruptcy two years previous, income of $65000 year with $17000 in credit cards. A house payment of $2400 a month.

He had taken out $20,000 from the equity in his house to buy the Suburban. They bought a black, tan interior LS with no third row. They buy it, paying 17% INTEREST FOR 84 MONTHS. What the hell? They financed about $12k at 17%? Now, it was full sticker so I got a nice commission but do you think he's still making the payments, or has he handed the keys back to the bank.

So in the end, who bent over and took one for the team? GMAC. That kinda crap has to stop. That's why GM is in the toilet.
 
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