General Motors has moved to reduce its dependence on subprime loans, according to a new report from Moody’s Investor Services.
General Motors Financial, the Dallas-based finance company GM acquired after it escaped bankruptcy in 2009, had its roots in the sub-prime finance business that fell into disfavor during and immediately after the 2008-2009 recession.
However, as car sales recovered, the company’s collection of lower-than-prime loans, meaning loans to consumers with scores less than 680, began growing, hitting a high 83% of the portfolio in 2014. Since that high water mark, the finance company’s reshaped its portfolio. (more…)