GMAC, the primary lending source for GM vehicle purposes, announced Monday it will severely restrict its future auto loans.

From now on, GMAC will only lend to prime borrowers, who have credit scores of over 700.  It's expected the new restriction will block nearly 25 percent of all loan applications.  

In addition, GMAC plans on limiting contracts with higher advance rates and longer terms. said it will restrict contracts with higher advance rates and longer terms.

Though the new policy is hard on consumers, it's also troubling many GM dealerships.  GMAC has suspended sales bonuses to high-volume dealers, and also increased its fees for offering consumer financing with no incentives by 75 basis points.

GMAC, co-owned by both General Motors and Cerberus Capital Management, attributed the new rules to "the lack of stability in the global capital and credit markets."

Source: Automotive News