GMAC to allow only best to finance cars

GMAC LLC, the consumer finance arm of General Motors Corp., will limit auto loans to customers with credit scores of at least 700, making it harder for some customers to buy a car or truck. GMAC also raised by 0.75 percent the rate it charges auto dealers for making loans that aren't part of special incentive programs, the Detroit-based company said today in a statement. Most loans will be limited to 60 months, according to a letter sent to dealers.

Credit is being curbed to customers as GM and GMAC battle speculation about their survival. Sales at the automaker are down 18 percent this year, and GM may face bankruptcy as the credit crunch drives down business, according to Standard & Poor's analyst Robert Schulz. GMAC in June had to arrange more than $60 billion of credit for itself as foreclosures put the firm's home mortgage unit on the brink of failure.

“The credit markets are tightening up everywhere and this is just a reflection of that,'' said GM spokesman John McDonald in an interview. “Dealers have a number of options for customers, including GMAC and non-captive financing, to be able to finance vehicles.''