loans to non-prime consumers, the former captive’s UK arm has not
“significantly” slowed its support for new car approvals, said
managing director for sales and marketing, Dennis Foley.
He told Motor Finance: “Our decisions are made in agreement with
what’s going on in the market, and the situation in the US is very
different to that in the UK.
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“There has been a very slight tightening in GMAC UK’s
underwriting due to overall economic conditions, but we are still
working together with General Motors [GM] and Vauxhall to support
dealers and customers.”
Foley said that although volumes have been hit by the “shrunken
market for car sales”, GMAC in the UK is still working closely with
its former manufacturer parent “to offer a full range of incentives
for GM customers”.
However, he said that the outlook for the motor finance market
was less than rosy, predicting “several hard months [well into]
next year, at least” for the industry.
Foley declined to comment on continued rumours that GM is
considering a swap of its remaining 49 per cent stake in GMAC for
the manufacturing operations of Chrysler, owned by private equity
house Cerberus Capital Management, which bought a controlling stake
in GMAC from GM in 2006.
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By GlobalDataIn the US, GMAC will no longer accept customers with a FICO
credit score lower than 700 (with a score of 680 and above usually
considered ‘prime’), while it virtually ceased lease origination in
September. The tightening of GMAC’s underwriting practices will
hurt GM, as US car buyers find it more and more difficult to
finance their purchases, and dealers are as a consequence unable to
shift their stock.
The decision was taken after the ratings agency Standard &
Poor’s put GMAC and GM on CreditWatch with negative implications on
October 9, which may further raise the cost of funds for GMAC. But
it is “too early to say” what the long-term implications for GMAC’s
operations in the UK will be, Foley said.
